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Apprenticeships need "radical reform" says CIPD

Fri, 12 Aug 2016 08:04:03 +0000

The apprenticeship system is not meeting the needs of young people and is being abused by some employers looking to cut labour costs for workers of all ages.

These are the findings of a new report into apprenticeships by HR and people development body CIPD. The panel of vocational training experts that authored the report has concluded that there are "deep-lying problems around apprenticeship provision in the UK".

The report reveals that six in every ten apprenticeships created in the UK are only at Level 2, equivalent to just five GCSE passes. In addition, apprenticeships are increasingly being used by employers to "meet the training needs of low-paid and typically older employees".

While the number of under-25-year olds starting an apprenticeship has increased by 24% since 2010, the number of over-25s increased by 336% and the number of over-60s grew by 753%.

This, says the CIPD report, undermines the role of apprenticeships "as a structured route into skilled work for those entering the labour market for the first time". The CIPD is calling for radical reform of the whole system, as well as a rethink on the Government's planned Apprenticeship Levy.

Tess Lanning, editor of the report, said: "When Government ministers talk about creating three million apprenticeships, most people assume that they mean high quality training routes into skilled jobs for young people entering the labour market for the first time. Yet, in reality, an increasing proportion of 'apprenticeships' are, in fact, low-level programmes that accredit the existing skills of older employees already competent in their jobs, some of them approaching retirement. In too many cases apprenticeships are in low-paid, low-skilled jobs and offer little or no actual training or wage returns."

The CIPD is calling on the new apprentices and skills minister, Robert Halfon MP, to work with employers and training providers in order to increase the number of advanced and higher level apprenticeships for young people. Current targets and the planned introduction of an Apprenticeship Levy, it says, are likely to "further undermine apprenticeship quality".

More on this topic:

How to hire an apprentice ARTICLE
Why your business should hire an apprentice BLOG
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Small business owners suffering from burnout

Fri, 12 Aug 2016 08:03:50 +0000

A new survey of small business owners has found that many are stressed and tired because of long hours and worries about the future.

The 2016 Small Business Wellbeing report, produced by Bizdaq, has found that most business owners (64%) say that they are happy with their work-life balance - but that still leaves many business owners struggling.

Long hours are a key issue. While the average Briton works 37.4 hours a week, small business owners work an average of 50.5 hours a week. The report finds that more than half a million small business owners haven't been on holiday since they started their business.

As a result, 28% say that their health has been negatively affected by running their business; a further 26% say their social life has been negatively impacted; and 18% say that their family life has been affected.

The researchers asked small business owners how the UK's decision to leave the EU had affected their business confidence. 36% reported feeling more worried about the future for their business in light of the result, with just 20% saying they felt more confident.

The survey has also highlighted significant regional differences - the north is home to far more unhappy small business owners, with 26% saying they're unhappy with their work-life balance compared to 14% in the south. In addition, twice as many small business owners in the north (22%) say their health - both physical and mental - is affected by running their business as in the south (11%).

"The fact that so many small business owners are struggling is astonishing and really shows the need for the Government to do more to support the backbone of the British economy. Now more than ever, the UK needs strong small businesses, and without the support they need we could start to see them close down," said Sean Mallon, ceo of Bizdaq.

"The [abolition] of Business Link and the regional adviser programme by the Coalition government in 2010 left a vacuum in small enterprise in the UK. Where small business owners previously felt the benefits of having a local support network, there are currently no services that owners can turn to when looking for support."

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Interest rate cut won't help, say IoD members

Fri, 12 Aug 2016 08:02:09 +0000

The Institute of Directors has questioned whether the Bank of England's interest rate cut to an all-time low of 0.25% will make any difference to the UK economy.

It says the UK's most pressing problem is not liquidity but confidence; and an IoD survey this week among members shows that although the cut has been welcomed, six in ten think it "will not have a discernible effect on their performance".

The IoD is calling on the Government - rather than the Bank of England - to do the "heavy lifting" to improve business confidence. IoD economist James Sproule said: "In the aftermath of the referendum, the Bank of England's credibility in promising it would do whatever it took to maintain market liquidity was very important. But the problem now is confidence, not liquidity or access to capital. The cost of capital is not the major factor for business at the moment."

He added: "The Bank cannot do the heavy lifting on boosting business confidence, the Government has to play its part. The real test of confidence is going to be the Autumn Statement, which could be usefully brought forward several weeks."

IoD research also shows that a "business confidence gap" is emerging - firms are worried about the economy, but they are generally positive about their own outlook.

Simon Walker, IoD director general, said: "The UK badly needs an injection of confidence to prevent general concerns turning into lots of individual decisions to stop hiring and investing. We need the Government to produce a bumper, feel-good Autumn Statement. Increasing tax breaks for investment and cutting corporation tax would be a very good start, as would delaying the poorly designed Apprenticeship Levy."

The latest IoD survey also shows a change of heart by businesses about the timescale for tackling the fiscal deficit. In May, 80% of directors supported the Government plan to eliminate the deficit by 2020. But by late July, 78% said prime minister Theresa May was right to drop that target.

Meanwhile, the CBI has said the interest rate cut should be a "shot in the arm" for business and consumer confidence. Rain Newton-Smith, CBI chief economist, said: "The Bank's action will help restore confidence in the UK economy and what's now most important to businesses is that the Government develops a clear plan and timetable for EU negotiations."

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One in five micro-firms faces auto-enrolment fines

Fri, 12 Aug 2016 08:01:34 +0000

Britain's micro-businesses could be facing collective fines of up to £22 million because they are unaware of their responsibilities when it comes to pension auto-enrolment.

Pension software provider Paycircle has analysed Pensions Regulator data and found that around 55,000 of the UK's micro-businesses (21% of the total) only have a "limited understanding" of their duty to provide staff with a workplace pension.

There are 262,000 micro-businesses (employing one to four people) out of the 1.8 million employers that must enrol in a workplace pension between now and 2018. Paycircle has calculated that these micro-businesses could collectively face fines of some £22 million for non-compliance. This is based on average fines from the Pensions Regulator of £400.

Catherine Pinkney, co-founder of Paycircle, said: "The Pensions Regulator has done a huge amount to raise awareness of auto-enrolment responsibilities among the UK's smallest businesses. Yet despite this comprehensive marketing and educational push, a sizeable chunk of micro employers are still very much in the dark as to what to actually do as their staging date descends on them. These businesses need to sit up and take note or risk being slapped with a sizeable penalty."

Charles Counsell, executive director for automatic enrolment at The Pensions Regulator, said: "The law is the law. While the vast majority of employers are complying with it, some small employers are still risking fines by failing to understand how it affects them."

Data from the Pensions Regulator shows that non-compliance rose between the first and second quarters of this year. The regulator used its powers 4,489 times in Q2 of this year, up from 4,161 occasions in Q1.

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Also in the news this week - 12 August 2016

Fri, 12 Aug 2016 08:00:26 +0000

Want to become a Government supplier?

The Crown Commercial Service (CCS) has launched a new series of webinars to help small businesses win Government contracts. The webinars will take place once a month for the next 12 months; they'll be hosted by industry experts and will provide advice on winning work as a Government supplier. The series kicks off on 18 August with an Introduction to becoming a Government supplier hosted by Cass Chideock, CCS deputy director of small business policy, and Emma Jones, the new small business crown representative. Each webinar will last 30 minutes with time for questions and answers.

Health and safety for apprentices needs improving

Better advice and information is needed for employers to ensure the health and safety of their apprentices, according to an inquiry by RoSPA. Much of the safety advice currently available assumes that the apprentice will be aged 24 or under, male, and working in a manual trade, whereas a recent House of Commons paper shows that the typical apprentice is 25 or older, female, and in the service sector. The number of apprentices in the UK is set to triple to three million by 2020. The full report is on the RoSPA website.

Less red tape attracts overseas entrepreneurs to UK

Thousands of overseas entrepreneurs are forming companies in the UK to avoid red tape in their own countries, according to new research by Made Simple Group. More than 170,000 non-UK nationals registered firms with Companies House in 2015, a 160% increase since 2010. The highest number came from Poland, followed by the Republic of Ireland and China. Last year the UK was ranked by the World Bank Group as the sixth easiest country to start a business in. Howard Graham, Made Simple ceo, said: "International entrepreneurs are choosing to set up in the UK … because the process is extremely straightforward and affordable compared to other countries."

TUC report reveals extent of sexual harassment at work

More than half (52%) of women, and nearly two-thirds (63%) of women aged 18-24, say they have experienced sexual harassment at work, according to new research from the TUC in collaboration with the Everyday Sexism Project. The study was carried out by YouGov and it reveals that 32% of women surveyed have been subject to unwelcome jokes of a sexual nature at work; 28% have been the subject of comments of a sexual nature about their body or clothes; and 23% have experienced unwanted touching. The report also finds that 79% of women who said they experienced sexual harassment at work did not tell their employer about it. TUC general secretary Frances O'Grady said: "Employers must be clear they have a zero tolerance attitude to sexual harassment and treat any complaint seriously."

What not to do on Dragons' Den

Fri, 05 Aug 2016 08:05:21 +0000

New research by small business platform Geniac reveals the main reasons why business pitches fail to impress the investors.

With the Dragons currently back on our screens for a fourteenth series, Geniac analysed recent episodes of the show to identify where unsuccessful pitches fell down.

More than half (56%) of participating entrepreneurs went home empty-handed after bidding for investment from the multimillionaires. 51% of those failed because of concerns from the Dragons about basic financial inaccuracies in their business planning.

Of those, 43% of pitches overestimated the value of their business. More than a third (35%) failed to demonstrate how they would make a profit with their business, and, most shockingly, the remaining 22% had little or no solid financial planning in place at all.

The Dragons also said they were out because of:

a lack of appropriate legal documents (10%);
poor management practices (12%);
the products themselves (23%).

Mike Galvin, co-founder of Geniac, said, “The series is a reminder of the importance of key business fundamentals for starting and growing a business. It is alarming to see the high number of basic errors made by entrepreneurs and small business founders making the pitch of their lives.

"Our research is evidence that not having solid financials in place will cost a small business dearly, particularly fledgling companies with limited budgets."

By contrast, successful pitches to the Dragons displayed solid financial planning, an appealing product with great potential, and a passionate and inspiring pitch performance by the founders.

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Tax hikes mean SMEs 'reinvest less in business'

Fri, 05 Aug 2016 08:04:09 +0000

As new tax rates on dividends arrive, UK small business owners have been taking more of their profits out of the business rather than reinvesting them.

UK SMEs paid out 94% of their profits as dividends last year, significantly up from 63% the year before, according to accountancy firm Moore Stephens.

Total dividend payments made by UK SMEs increased to £28.3 billion in 2015-16, up from £17.5 billion in 2014-15, as changes to the taxation of dividends became law in April 2016.

Most SME business owners now have to pay higher taxes on dividends because of changes announced by George Osborne in the July 2015 post-election budget. Moore Stephens says these changes will significantly increase the tax burden for businesses.

The Government has introduced an allowance that means the first £5,000 of dividend receipts in a tax year will now go untaxed; however, business owners and other taxpayers receiving dividends now have to pay a higher marginal tax rate on the remainder, as of 6 April 2016.

The revised tax rates on dividends are as follows:

basic rate taxpayers now have to pay 7.5%; previously they were not liable to taxation;
higher rate taxpayers have to pay 32.5%, compared to 25% previously;
additional rate taxpayers now pay 38.1%, up from 30.56%.

Mike Cooper, partner at Moore Stephens, said the new dividend tax has already had a big impact. "Ahead of the changes, SME owners reduced reinvestment into their businesses in 2015-16 compared to the previous year, and the changes will continue to have an impact on future plans."

The EU referendum may have been another key factor, he said. "It is possible that the uncertainty over the Brexit vote also contributed to the rise in profits paid out as dividends by SMEs. Some business owners may have acted on a just-in-case basis and taken out extra funds to support themselves through any post-Brexit instability."

Businesses will see a big difference in their finances going forward, he added. "From now on, business owners will have to take out a higher percentage of profits in order to maintain the same post-tax income. Many small business owners are basic rate taxpayers, who will be particularly hard hit by the changes and may face difficulties when looking to grow their businesses."

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HMRC Dividend Allowance factsheet TOOL
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SMEs not doing enough to protect customer data

Fri, 05 Aug 2016 08:03:23 +0000

The majority of UK SMEs are not doing enough to protect their online customer data, according to experts.

Close Brothers' latest quarterly survey of UK SME owners has found that 63% of companies have made the decision not to invest in better online security in the next 12 months, while the remaining 37% indicated that they would.

However, new EU legislation (the General Data Protection Regulation, or GDPR) will take effect within two years - and, whether the UK is in or out of the EU, it's something that UK firms trading overseas will need to adhere to according to the Information Commissioner's Office (ICO). It said: "If the UK wants to trade with the single market on equal terms, we would have to prove 'adequacy' - in other words, UK data protection standards would have to be equivalent to the EU's GDPR framework starting in 2018."

"Businesses of all sizes should be aware of their responsibility when it comes to protecting customer data," said Ian McVicar, managing director of Close Brothers Technology Services. "Keeping customers' details safe [is] at the core of the EU's new data protection legislation. It is intended to strengthen and unify data protection for individuals within the EU."

The survey also shows that many firms are not doing enough to protect themselves from cyber crime. While the majority of SMEs (57%) are concerned about the issue, a significant minority are not (36%).

What's more, only 41% of businesses feel "adequately protected", 17% are unsure about their levels of protection and 21% know it is an important issue but "haven't had time to look into it", while a further 21% "don't think it is an issue for our business".

Commenting on the research, Chris Stoneff, VP technical management at Lieberman Software, said: "One of the greatest steps organisations can take to improve security comes down to administrator passwords [which] protect access to the most sensitive areas of a company's network. When these credentials are compromised, it is easier for cyber criminals or malicious insiders to move around the network and infiltrate critical systems, and even gain access to customer data."

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CBI survey: SME production up but optimism down

Fri, 05 Aug 2016 08:02:56 +0000

The UK's small and medium-sized manufacturers saw a rise in the volume of output in the three months to July, but business optimism fell sharply, according to the latest CBI Quarterly SME trends survey.

The CBI survey of 472 firms reported that total new orders and new domestic orders were relatively unchanged in the past quarter. However, firms expect these to fall over the next three months and business optimism has fallen at its fastest pace since January 2009.

Investment intentions in the year ahead are also cautious, according to the CBI. Investment in buildings, plant and machinery has been scaled back, but SME manufacturers intend to increase spending on product innovation and training for staff to tackle the skills gap.

Optimism about export prospects for the year ahead rose slightly, with SMEs reporting the first improvement in competitiveness in EU and non-EU markets since 2013. Although the volume of export orders fell again on the previous quarter, the poll shows that SMEs anticipate that they will rise in the coming quarter.

The key data in the CBI survey shows that:

only 8% of SME manufacturers said they were more optimistic, while 53% said they were less optimistic, giving a balance of -44% - the sharpest fall in optimism since January 2009;
companies expect output to be flat in the next quarter (+1%) and domestic orders are expected to fall;
export orders went down by a balance of -8%; but firms anticipate export growth in the next three months;
hiring intentions are flat for the next quarter.

Rain Newton-Smith, CBI director for economics, said: "The UK's SME manufacturers reported higher production [and] more staff hired and now expect to sell more of their world-class goods overseas over the next quarter, with a weaker sterling having a hand in this. But overall they do feel less optimistic. Naturally, much of the concern is related to uncertainty and business wants to now see the new Government deliver a clear plan and timetable for the EU negotiations ahead, while cracking on with immediate domestic priorities."

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Margot James is new small business minister

Fri, 05 Aug 2016 08:01:17 +0000

The Government has unveiled the full list of ministerial responsibilities in the new Department for Business, Energy and Industrial Strategy (BEIS), including the appointment of Margot James MP as small business minister.

BEIS was created in July by prime minister Theresa May when she folded the Department for Energy and Climate Change into the Department for Business.

Following the appointment of Greg Clark as secretary of state for BEIS, the remaining ministerial positions in the department have now been filled.

The Government says that the new ministerial portfolios reflect the key priorities for the department including research and innovation and climate change. The new ministers are:

Nick Hurd, minister of state for climate change and industry;
Jo Johnson, minister of state for universities, science, research and innovation (joint minister with Department for Education);
Baroness Neville-Rolfe, minister of state for energy and intellectual property;
Margot James, minister for small business, consumers and corporate responsibility;
Jesse Norman, minister for industry and energy.

Business and energy secretary Greg Clark said: "I am thrilled to have been appointed to lead this new department charged with delivering a comprehensive industrial strategy, leading Government's relationship with business, furthering our world-class science base, delivering affordable, clean energy and tackling climate change."

The Federation of Small Businesses (FSB) has welcomed the appointment of Margot James as the minister for small business, consumer protection and corporate social responsibility.

FSB national chairman Mike Cherry told the Guardian: "We greatly value Ms James' support for small businesses as she herself was a successful entrepreneur before moving into politics and is able to relate to the challenges our members face. The first priority in her ministerial in-tray must be to be establish a small business commissioner to tackle late payments, and to work with the Treasury on how to boost economic growth."

James has been the MP for Stourbridge since 2010 and she sat on the Business, Innovation and Skills select committee between 2010 and 2012. She supports the reduction of business rates.

Image: The Cabinet Office on Flickr

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Also in the news this week - 5 August 2016

Fri, 05 Aug 2016 08:00:42 +0000

The truth about workplace romances

More than nine out of ten people (93%) admit they've had a crush on someone at work, but very few (15%) act on it, according to new research. A survey by Protecting has found that the vast majority of people were too scared to start an office romance: 62% were worried about harassment laws; 46% were too shy; 31% feared rejection; 22% were aware that the other person was already in a relationship; 18% thought a workplace scandal could affect their prospects; 16% didn't want to mix work and romance; and 11% said their workplace had a "no relationships" policy.

SMEs outside London have greater chance of success

UK start-ups launched outside of London are more likely to survive than new firms in the capital, according to research from eBay UK. Using Office of National Statistics (ONS) data, the study found that 39% of London start-ups survive longer than five years, compared with 45% of businesses in the South West, 44% in the East of England and 42% in Scotland. Businesses in the Shetland Islands have the highest survival rates in the UK, followed by Melton in the East Midlands and Purbeck in the South West.

IoD: Older workers need support to retrain

Employment minister Damian Hinds has released new figures showing that more people aged 50 to 74 are in work than ever before. Lady Barbara Judge, chairman of the Institute of Directors (IoD), said: "An ageing population, coupled with the way technology is changing the nature of work, means the country is facing a big challenge. Businesses have to work together with Government to support older employees to stay in fulfilling and productive jobs. We need to find new and easier ways to ensure the skills of older workers remain relevant and up to date. The IoD has proposed a number of policies, including simple tax incentives, to encourage older people to return to education."

Five myths about cloud computing security

guestbloggerITD — Tue, 02 Aug 2016 12:58:46 +0000

It's enough to make us feel old, but cloud computing has been around for over a decade. That's enough time for it to become established as a key tool for businesses of all sizes. However, it's also long enough for some myths to have arisen that need putting straight once and for all.

Myth 1: The cloud is less secure than on-site provision

There are still people who believe that IT provision in-house and on-site is safer. But it's not true.

The first thing to recognise is that there are risks with both cloud and on-site IT. If someone is willing - and skilled enough - both can be compromised and both can be hacked.

There are pros and cons on both sides, but it's a myth that the cloud is less secure than on-site provision and that needs to be challenged.

Myth 2: All cloud providers are equal

As cloud computing has grown in size and reach, a number of standards have emerged, but there is no agreement on which are the most important. Here is a list of cloud security standards that you can look out for.

As the change in EU legislation has shown, in a crisis or breach it's your reputation and your future success on the line. As the customer, it's up to you to make sure you're happy - but recognise that not all providers are equal.

Myth 3: Your provider is responsible for the security of your data

While the future of our involvement in the EU is still in a state of flux, until we officially leave we're bound by their rules - and for IT this means the European Data Protection Regulation.

This has some significant implications for businesses, which Computer Weekly has done a good job in collating. One of the biggest issues is the storage and sharing of data outside the EU.

The regulations state that: "If data belonging to EU businesses or citizens is stored outside the EU, the transfer of that data needs to be secure with data protection requirements at the other end at least as strong as those in the EU."

Those with customer data in the cloud will need to ensure they stay on top of this, and the increasing demands of the Data Protection Act. It's your responsibility, not the supplier's.

Myth 4: Hackers only target big businesses

High profile hacks may make the headlines, but hackers don't only target big business.

According to Symantec, small businesses are increasingly being targeted by hackers. The reason is that while they may have access to more information going after big boys, targeting SMEs is often more profitable as their security is weaker.

What this means is that business of all sizes need to stay on top of their security. There's nowhere to hide.

Myth 5: You can just ban BYOD

Bring your own device (BYOD) is one of the biggest opportunities for the cloud, but is also a huge threat. Many organisations prefer to bury their head in the sand and ban BYOD - but that doesn't work.

Employees may be the weakest link in the chain for security, according to GCHQ, but using our own devices - phones, tablets and computers - to access the cloud isn't likely to stop soon.

There are risks with BYOD, but these can be managed. It's clear that a ban is the wrong approach and just isn't practical.

Cloud computing is here and - despite these and many other myths - is a safe, reliable and efficient way to organise your IT infrastructure. There are risks, but there are rewards too for businesses of all sizes.

Sponsored post.

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Are the self-employed realistic about retirement?

Fri, 29 Jul 2016 08:04:55 +0000

Over half a million self-employed people are relying on their business to fund their retirement and just one third pay into a private pension, according to new research.

An estimated 630,000 self-employed people in the UK view their business as their pension and plan to continue to work or rely on the proceeds from the sale of their business to cover their finances in later life, according to Aegon's 2016 Retirement Readiness Report.

Only 36% of self-employed workers are saving for retirement through a private pension; nearly two-thirds think that only half or less of their retirement income will be made up of a private or a previous workplace pension. Unlike an estimated nine million employees, the self-employed don't benefit from automatic enrolment and employer contributions.

However, those sole traders who are making pension provision are actually more engaged than the broader population according to the report; and, on average, they have more money saved in their pots. The average amount these self-employed workers have saved in pensions is £40,400 - which is £5,200 more than the average across the rest of the population.

The self-employed also have more ambitious retirement expectations than the rest of the UK. They expect an annual retirement income of £45,700, compared to the UK average of £38,000, and they also expect to retire the earliest, at 63. However, a third (30%) expect to work into retirement, compared to 24% of payroll workers.

Recent changes to the state pension have benefitted the self-employed who reach retirement age on or after 6 April 2016 who are now entitled to up to £155.65 a week, compared to a previous maximum entitlement of £119.30 under the previous basic state pension.

Steven Cameron, pensions director at Aegon said: "Our research shows the self-employed have particular needs and aspirations when it comes to saving for retirement. There's … a significant gap between saving behaviours and very ambitious expectations for retirement, with the self-employed expecting to not only retire earlier, but also receive more income in retirement than payroll employees. There are real risks in assuming that your business can fund you through retirement."

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Fears about job security rise after EU referendum

Fri, 29 Jul 2016 08:03:09 +0000

The UK's decision to leave the EU has left many employees feeling vulnerable about their job security, a new CIPD survey has revealed.

The CIPD/People Management survey has found that since the referendum, 36% of employers said staff had expressed concerns about job security and a further 36% said that non-UK employees had expressed concern about their continuing right to work in the UK.

The survey also highlights evidence of increased workplace tension and division as a result of the vote to leave the EU, with almost one in ten (8%) of respondents saying incidents had been reported.

Ben Willmott, CIPD head of public policy, said: "There is no doubt the vote to leave the UK has had a significant impact on the workplace with many people worrying about their future employment prospects. This is especially true of non-UK nationals, with many clearly concerned about their ability to continue to live and work in the UK after the vote. The Government needs to clearly set out their plans at the earliest opportunity for non-UK citizens to give those workers the clarity and security that they are seeking."

The news comes as ONS statistics show that the UK economy performed more strongly than expected just before the referendum, growing by 0.6% in the three months to the end of June; it means growth was 2.2% on an annual basis. Joe Grice, ONS chief economist, said: "Any uncertainties in the run-up to the referendum seem to have had a limited effect."

In addition, the latest labour market statistics from the Office for National Statistics (ONS) also show that employment actually rose in the three months to May this year by 176,000 with unemployment falling by 54,000.

Suren Thiru, head of economics at the British Chambers of Commerce (BCC), said: "The fall in the unemployment rate shows that the UK's labour market continues to be a bright spot for the UK economy. The rise in employment echoes our own survey data and shows that, before the EU referendum, businesses were confident enough to hire and grow despite the softening economic environment. Now that the UK has voted to leave the EU, businesses face new uncertainty in the transition to new economic and political arrangements."

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SME confidence "fell off cliff" after Brexit vote

Fri, 29 Jul 2016 08:02:39 +0000

Only a quarter of small business owners expect the economy to improve over the next 12 months, a fall of over 30% from just three months ago.

The findings of the latest Smith & Williamson Enterprise Index show that SME perceptions about their own prospects in the next year fell by 27%, quarter on quarter, with one in two businesses pessimistic about their prospects.

"Confidence was badly affected by uncertainty in the lead up to the referendum vote but responses submitted after the event indicate that belief in the economy and business prospects fell off a cliff," said Guy Rigby, head of entrepreneurial services at Smith & Williamson.

"Only a third of respondents were optimistic about their own prospects after the referendum; a decline of nearly 20 points since the last quarter. Furthermore, only 15% of business owners and entrepreneurs expected the economy to improve in the post-referendum landscape, a further decrease of 13%."

The Smith & Williamson Enterprise Index, which measures the views and confidence of owner-managers and entrepreneurs in the UK, decreased dramatically over the past three months, falling from 111.4 to 97.7, putting it below its starting level of 100 in 2013.

The number of firms planning for growth or acquisition declined by 11% after the referendum. Many respondents also said they have put hiring on hold; less than one in two expect to increase headcount over the next quarter, a decline of close to 20% from three months ago.

However, belief in Government support for private enterprise remained steady at 56% and even rose by three points just after the referendum. "Despite the economic negatives, and the challenging state of affairs, it does appear that many business owners believe there is the potential to bounce back in a positive way," said Rigby.

"In due course, and with the benefit of hindsight, this response may be seen as an overreaction," he added. "As we are already seeing, there will be some casualties, but change brings opportunity, so there is no reason why the majority of businesses can't do well."

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Small firms unsure about funding options

Fri, 29 Jul 2016 08:01:28 +0000

Awareness of alternative funding options remains low among UK firms, according to surveys by two of the UK's business bodies.

Both the British Chambers of Commerce (BCC) and the Forum for Private Business (FPB) have recently polled their members about their experiences of finding business funding.

The British Chambers of Commerce surveyed more than 1,000 businesses in conjunction with Bibby Financial Services and found that there is a significantly lower awareness of alternative and equity finance products - such as peer-to-peer funding and trade finance - compared with traditional loans and overdrafts.

The key findings from the BCC survey are:

The four types of lending that firms were most familiar with were: bank overdrafts (93%), bank loans (88%), commercial credit cards (86%) and leasing/hire purchase facilities (86%);
The four types of lending firms were least familiar with were: mezzanine finance (19%), angel finance (39%), peer-to-peer funding (42%) and trade finance (46%);
Of the firms that were successful in securing finance but rejected the terms offered, 54% did so because the interest rate offered was too high, and 39% said the collateral required was too high.

Almost half of businesses (48%) applied for finance in the past 12 months; business growth (42%) was the main reason for seeking finance, followed by improving cash flow (26%) and funding for start-ups (14%).

Dr Adam Marshall, BCC acting director general, said: "The clear message needs to be that growth funding is available. At a time of transition for the economy, Government help can play an important role. So there is work to be done to raise awareness among businesses of schemes such as the British Business Bank."

Meanwhile, research by the Forum of Private Business has found that over a quarter of small businesses have been unable to grow as they didn't have access to the right sort of finance. In addition, a sixth of those polled said they require finance in 2016, but are not confident of being able to access it.

The FPB has partnered with Alternative Business Funding (ABF) to provide 12,000 Forum members with direct access to the UK's leading alternative funding marketplace through a new online tool called Funder Finder. The portal directs SMEs to all kinds of funding options, including traditional loans as well as alternative sources of investment.

More on this topic:

Finance your start-up business BRIEFING
Asset finance Q&A
Business finance and support finder TOOL

Also in the news this week - 29 July 2016

Fri, 29 Jul 2016 08:00:08 +0000

Flexibility is key to staff happiness

Faced with two job similar offers, 92% of workers in SMEs said they would choose the one that offered flexible working, according to new research by Regus. And a third of respondents (33%) also said they would have stayed longer in previous jobs if flexibility had been offered. "The days of the fixed hours, fixed location job are becoming as outdated as the office fax machine," said Richard Morris, UK ceo of Regus. "Flexibility is no longer seen as a perk, it is now a key differentiator for talented individuals."

Would an email reminder help you file accounts on time?

Firms that have switched to email reminders from paper are more likely to file their accounts and annual return on time, and are less likely to face penalties as a result, according to Companies House. Companies can choose up to four people (including an agent) to receive the reminder and documents can be filed immediately via a link in the email. Sign-up for email reminders is available on the Companies House website.

Dragons' Den is back

Now in its 14^th series, Dragons' Den is back on the box with Peter Jones, Sarah Willingham, Touker Suleyman, Deborah Meaden and Nick Jenkins on the panel. After 14 years, Jones is now the only original Dragon. The Intellectual Property Office (IPO) will be blogging about the series and discussing issues related to intellectual property in each episode.

Mental health issues affecting more employees

The number of people saying that they have experienced mental health issues while in employment has gone up over the past five years according to new research from the CIPD. Almost a third (31%) of employees surveyed in 2016 said they have experienced a mental health problem at some point during their working life, compared with 26% in 2011. Of those affected, 42% have experienced a problem in the past 12 months. The CIPD is calling on businesses to take a more preventative approach to employees' mental wellbeing, encouraging a culture of openness and providing more support.

Eight of the best mobile apps for small businesses

guestbloggerITD — Mon, 25 Jul 2016 11:26:46 +0000

If you're a sole trader or owner of a small business, there has never been a better time to visit the app store of your chosen smartphone. Thanks to the efforts of a thriving developer community and increasingly powerful hardware, the ability to remain productive while on the move is now available to us all.

There are literally thousands of apps available on every conceivable mobile platform, all of which are designed to make the best use of small screens and provide users with tools previously only available on cumbersome desktop and laptop computers.

Unfortunately, with such a colossal choice of apps to sift through, it can be somewhat daunting for those with limited time to hunt down the best tools for their business.

Good news - we've done the hard work for you, which is why, in this post, you'll find 8 of the best mobile apps for small businesses.

1. Evernote (iOS, Android, free)

If you spend most of your day wading through multiple notebooks trying to find the essential points you noted down during your last client meeting, Evernote may very well be the most useful discovery you'll make today.

Available across pretty much every mobile and desktop platform you can think of, Evernote gives you the ability to create multiple notebooks into which you can pile all of your notes, images, web pages and doodles. You can tag notes for easy retrieval later on and the ability to collaborate with other Evernote users completes an app that should be on the home screen of every business owner's smartphone.

2. Xpenditure (iOS, Android, free)

Receipt management can be a considerable source of frustration for anyone running a small business, but with Xpenditure, you can finally wave goodbye to that wallet full of receipts and accompanying, bulging spreadsheet.

Simply take a photo of your receipt with your smartphone camera and Xpenditure will automatically decipher the amount, VAT, date and merchant. You can then draw up a monthly report when processing time arrives. Xpenditure saves an inordinate amount of time you can better spend on running your business.

3. Google Docs (iOS, Android, free)

Google's free alternative to Microsoft Office is very popular with small businesses, and the companion mobile apps increase the value of Google Docs considerably by offering all of the functionality found in their web-based brethren.

If you thought small-screen spreadsheet editing was a non-starter, we'd urge you to try our Google's range of mobile apps. The collaboration features alone are fantastic for any business that relies on communication with remote colleagues and partners.

4. Trello (iOS, Android, free)

Task and project management is often the bane of small business owners' lives. Thankfully, Trello performs the seemingly impossible feat of making such stuff enjoyable with an addictive card-based method for creating and actioning to-do lists.

If you work with others, you can all get involved by using Trello's simple but effective messaging system which enables conversations to take place within each task. Working your way methodically through multiple projects has never been so much fun!

5. Wordpress (iOS, Android, free)

Wordpress is one of the most popular blogging platforms, but is also a fantastic website creation tool for small businesses. The mobile app enables you to publish blog posts quickly while on the move and even lets you view detailed statistics for your website.

6. LastPass (iOS, Android, free)

Chances are, you've got a lot of passwords linked to your business and you're forever being told that you shouldn't use the same one each time. Easier said than done? With LastPass, you can put all of your login details for the various websites and services you use into one, secure location.

Password security has never been more important, and apps like LastPass enable you to operate a far more robust password regime. With it, you can set up different passwords for different services and let it do the remembering for you.

7. Hootsuite (iOS, Android, free)

Social media now features prominently in most marketing plans, and it's a safe bet that your business already has a presence on at least Twitter and Facebook. Unfortunately, managing multiple social networks can be time consuming, which is why Hootsuite makes this list.

In Hootsuite, you can bring all of your social media accounts under one roof and post content to them from a single screen. That means no logging in and out of websites and the ability to schedule posts in advance. It is hands down the best way to manage your social media campaigns.

8. Box (iOS, Android, free)

Mobilising your files has never been easier. Box offers new users a generous 10GB of cloud storage completely free of charge. You simply upload your files to Box and then use the mobile app to access them wherever you happen to be. Your brochures, spreadsheets and crucial documents can follow you wherever you go.

Summary

The above list is certainly not-exhaustive, but it represents what we believe to be the best examples of how a small screen can become any business owner's best friend while away from the office.

Written by Mark Ellis, author at BusinessFiction

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Self-employment is the "new normal"

Fri, 22 Jul 2016 08:04:16 +0000

The latest data from the Office for National Statistics shows, once again, that the number of self-employed people in the UK has gone up.

Statistics reveal that 4.7 million people are now working for themselves in the UK according to the Office for National Statistics (ONS). This equates to 14.9% of all employment.

The growth in freelance numbers, which stood at 3.8 million in 2008, has been driven mainly by the 88% boom in those taking up part-time self-employment between 2001 and 2015; however, full-time self-employment has also risen by 25% in that time.

According to the new ONS report, Trends in Self-Employment in the UK 2001-2015, those that are self-employed are generally happy with their employment status and those moving from employment to self-employment "tend to have somewhat higher pre-transition hourly earnings than workers moving to new employee positions: trends which are consistent with making a positive choice, rather than being forced to be self-employed."

The ONS report concludes that the rise in self-employment has not been caused by the 2008 downturn but has its roots in employment trends that go back to the beginning of the 21st century.

The report says: "While this strong performance is among the defining characteristics of the UK's economic recovery, the recent rise in self-employment is the extension of a trend started in the early 2000s … self-employed workers are broadly content with their labour market status. Relatively few report negative reasons for becoming self-employed, few indicate that they are looking for alternative employment and among the part-timers, many respondents report that they would prefer not to work full-time."

The report also reveals that, increasingly, older people are choosing to enter part-time self-employment rather than retire; and those that are already self-employed are part of an aging group in the UK's labour force. It says: "As groups, both the part-time and full-time self-employed have aged considerably over the last ten years and in excess of that indicated by simple demographics."

Emma Jones, founder of small business support group Enterprise Nation, describes this trend as "unsurprising". Older people, she said, "are capitalising on a wealth of knowledge and experience they have acquired over their lifetime and still have a lot more to give. These people are not making this choice out of necessity through a lack of jobs, they are responding to new opportunities that technology brings and this will only increase."

Last week, the Cabinet Office announced the appointment of Emma Jones as small business crown representative. Working one day a week, her main focus will be procurement and she will be working with smaller businesses across the UK to help them bid for, and win, government contracts.

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Skills shortages are likely to worsen says CBI

Fri, 22 Jul 2016 08:03:48 +0000

Acute skills shortages are holding back businesses across many sectors, including manufacturing, construction and professional services, according to new research by the CBI.

This year's CBI/Pearson Education and Skills survey polled 500 companies that together employ over three million people just before the EU referendum. SMEs accounted for nearly a third of respondents (31%). The findings show that, even before the leave vote, firms were anticipating a growing skills gap.

The vote to leave the European Union only heightens the urgent need for action says the CBI. There is specific concern about future shortages - 69% of businesses are not confident about filling their high-skilled jobs in future (up from 55% in 2015).

Josh Hardie, CBI deputy director-general, said: "Skills are a top business priority but over two-thirds of firms don't think they will be able to get the people they need. The recent announcement of new high-quality vocational routes to sit alongside A-levels was a positive step … Now the priority is getting the Apprenticeship Levy fit-for-purpose."

The key findings of the survey show that:

There is a growing demand for higher skills: over three-quarters of businesses (77%) expect to have more jobs for people with higher-level skills over the coming years and needing more people with leadership and management skills;
Firms are committed to developing talent in-house; with only 42% of training done externally, the majority use an in-house dedicated training and development budget (76%), mentoring and coaching opportunities (68%) or support employees to study part-time (73%).

Rod Bristow, president of Pearson's UK business, said: "This is an important reminder, at a time when some say too many people go to university, employers are 'voting' for greater access to higher education with their job offers. We need a more informed debate about the skills higher education offers ... Another important finding from this year's survey, is that employers see academic and vocational qualifications as having equal stature. No coincidence then, that BTEC combined with A level is now the fastest growing route to university."

More on this topic:

Sectors still blighted by skills shortages NEWS
How to hold successful recruitment interviews CHECKLIST
How employing graduates can bring big rewards to small firms ARTICLE

Workplace obesity: are employers making it worse?

Fri, 22 Jul 2016 08:02:19 +0000

More than a third of workers say their employers have directly contributed to higher levels of obesity, according to new research.

A survey of 1,197 workers by Willis PMI Group found that 34% said that their employers had a part to play in their expanding waistlines.

Six in ten (59%) of respondents said that longer working hours prevented them from taking exercise. Almost half (48%) blamed a lack of exercise facilities and initiatives; vending machines and unhealthy snacks were cited by 44%; while unhealthy canteen food was a factor for 38% of those polled.

"The Government estimates obesity contributes to the loss of 16 million certified incapacity days each year and this research suggests employers may be part of the problem, rather than part of the solution," said Mike Blake, director at Willis PMI Group.

"The findings call for businesses to review their existing workplace cultures and practices and, where appropriate, proactively adopt health and wellbeing initiatives."

The problem is not likely to go away, with younger workers more critical of their employers than older colleagues - 42% of 18 to 34-year-olds blamed their bosses for contributing to higher levels of obesity, compared with 29% of 35 to 64-year-olds.

The study revealed that only 15% of employers currently offer cut-price gym memberships, 13% offer on-site gym facilities, 10% offer fitness classes and just 6% offer dedicated weight-loss schemes.

Blake said: "Support and education for employees to combat obesity can be relatively inexpensive to implement, but by encouraging staff to lead healthier lifestyles businesses can help cut obesity-related illnesses and the associated business risks."

NICE, the UK's National Institute for Health and Care Excellence, recommends that employers of all sizes develop a plan that encourages and supports employees to be more physically active. It suggests that business owners encourage employees to walk or cycle to and from work and that they also take every opportunity to be active during the working day.

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Don't leave exit planning too late, experts warn

Fri, 22 Jul 2016 08:01:37 +0000

As one third of small business owners in the UK approach retirement age, experts are warning them to start planning their exit strategy now.

Based on analysis of 403,000 directors on the boards of 83,000 UK SMEs, accountancy firm Moore Stephens has revealed that the average age of directors of UK small businesses today is 54.5 years old; two-thirds (65%) of them are over the age of 50 and 33% are over 60.

Moore Stephens is warning that many SME owners could be losing out when it comes to exiting their businesses because they are failing to make succession plans far enough in advance - either because they are too busy running the business or because they underestimate the time needed to get everything in place.

SME owners should start planning their exit strategy well ahead of their prospective retirement date says the accountancy firm. Many business owners think it will only takes months to prepare a business for sale, it says, but the reality is that this process can take years - not least because it can involve restructuring to ensure the business is attractive to potential buyers.

Business owners must also ensure the exit is structured in the most tax-efficient way, both for themselves or any family members taking over the business or its assets, says Moore Stephens.

Steve Wheeler, a partner at Moore Stephens, said: "For those who have spent a lifetime nurturing their companies and watching them grow, it can be very hard to let go. Their businesses are like their children. Company owners frequently either don't feel ready to address this issue until it is almost upon them or they are too busy with day-to-day operations to worry about it."

SME owners need to plan ahead, advises Wheeler. "If they take a forward-thinking approach, they can control the process to make sure that when they step down, they do so on the most advantageous terms for them. If they leave it too long, they may run out of time to get their business in a position to negotiate the best deal or, even worse, find their hand forced by ill health."

Tax planning is also crucial, he adds. Options may include tax reliefs, such as Entrepreneurs' Relief and Business Property Relief. In addition, setting up trusts could help reduce inheritance tax bills for relatives.

More on this topic:

Passing your business on to your family FAQs
Planning your exit from your business BRIEFING
Planning to sell your business FAQs

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Also in the news this week - 22 July 2016

Fri, 22 Jul 2016 08:00:31 +0000

What millennials really think

New research into the social media habits of millennials has found that politics and money-saving tips are more popular topics than fashion. Affilinet polled over 2,00 British consumers and found that the number one topic of interest on social media for those in the 18-24 age group was saving money (25%), followed by travel and holidays (20%) and politics (19%). Beauty and fashion trailed behind on 8% and 7% respectively.

UK could double number of small exporters says FSB

A new report by the Federation of Small Businesses (FSB) has identified a group of small businesses that could be exporting if they could get the right support. The report reveals that while 21% of UK SMEs currently export (a figure that has remained static for years), another 21% of small firms say they would consider exporting. The FSB survey shows that of those who accessed export support, 37% used support provided by the UK Government. Martin McTague, FSB national policy director, said: "Small businesses are well placed to make a significant contribution to the Government target to increase the value of exports to £1 trillion and support 100,000 new exporters by 2020. But the fact remains, many small businesses aren't aware of the support available or how to access it."

SMEs struggle to meet auto-enrolment deadlines

As large numbers of small firms in the UK embark on creating a compulsory workplace pension scheme, NOW: Pensions has revealed that one fifth (21%) of the businesses that signed up to its scheme in the second quarter of this year completed their auto-enrolment application after their staging date had passed. In the first quarter of 2016, the number of late-filing customers stood at 16%. Morten Nilsson, ceo of NOW: Pensions, said: "Small business owners have a lot to think about and it's easy for auto-enrolment to be put on the back burner but the fines for non-compliance are steep."

Broadband services for SMEs still in slow lane

A new report from the cross-party Culture, Media and Sport Select Committee has highlighted the need to improve broadband services for small businesses customers. Commenting on the report, Mike Cherry, FSB national chairman, said: "Access to superfast broadband is an ongoing issue, with business premises and business parks continuing to lag domestic rollout. A stretching Universal Service Obligation including small business premises is desperately needed to deliver acceptable levels of speed for all consumers and to put the UK in the digital fast lane."

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Protecting your business against cyber threats

guestbloggerITD — Tue, 19 Jul 2016 11:29:22 +0000

Big companies enjoy the protection of dedicated IT departments, but for small businesses cyber security can often be an after-thought. However, this can be an expensive mistake - the Federation of Small Businesses (FSB) recently found that two-thirds of small companies have been the victim of an attack in the past two years.

This need not be the case though. In fact most scams aren’t as sophisticated as you might think and simply rely on user complacency. The best weapon against this is vigilance, and a few simple steps can help you protect your business.

Established techniques used to commit fraud include "phishing" attacks and Trojan viruses.

Phishing uses email to trick you into giving out personal information, such as bank log-in details, or getting you to download malicious software (known as malware).

Trojans are a common type of malware and can be installed on your computer without you knowing. They can be designed to do many things, including steal money from your account.

Convincing imitations

Phishing works by sending you an email pretending to be from a genuine company, like your bank, often convincingly imitating the company’s branding and tone. Criminals can also spoof email addresses, so an email may look as if it is from someone in your own company.

The email might ask you to click on a link. This will take you to a fake website where you will be asked to input your secret information, where it will be captured. It also might ask you open an attachment, which will then install malware such as a Trojan.

Phishing emails can be very convincing, so check whether you recognise the sender’s address and if tone and language used is normal for them. If the request is urgent, would you expect this from the sender?

Play it safe

Be suspicious of all unsolicited emails, particularly those that ask you to make a payment, open attachments or click hyperlinks. Verify all email requests by telephoning the sender on a number taken from your own records.

This will help prevent Trojans from being installed, but it’s important to keep your computer safe in other ways too.

Install a firewall and antivirus software. We recommend our customers download Trusteer Rapport, which is free. Keep this software up to date, as well as your operating system and your web browser. Block access to websites your staff don’t need for business. Don’t conduct sensitive transactions over public wi-fi networks or while using internet cafes, as these can be insecure.

Finally, make sure your staff follow these rules and are as vigilant as you, as it just takes one mistake to leave you vulnerable.

For more information on cyber security, as well as other issues affecting small businesses, NatWest’s Business Growth Enablers are running education sessions across the UK, free to anyone running or setting up a business. To find an event near you, go to www.eventbrite.co.uk and search NatWest.

HMRC’s latest advice on phishing can be found on the GOV.UK website.

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Business groups look to Theresa May for answers

Fri, 15 Jul 2016 08:04:02 +0000

As Theresa May becomes the UK's new prime minister, business groups have called for decisive action on the economy after the Brexit vote as well as clarity on the status of EU nationals in the UK.

The Federation of Small Business (FSB) has called for "immediate action to improve business confidence" and has demanded that non-UK EU nationals, many of whom run small businesses or are employed by SMEs, are allowed to remain in the UK. It is also asking that UK small firms and the self-employed who work in the EU can continue to do so.

Mike Cherry, FSB national chairman, said: "With Theresa May now confirmed as the next UK prime minster, the Government must act decisively to secure our long-term economic stability after the decision to leave the EU. The new prime minister … must ensure that smaller firms' interests are taken into account - simple access to the single market, the ability to hire the right people, continued EU funding for key schemes and clarity on the future regulatory framework."

After a tumultuous few weeks, Cherry said "Government must get back to business on the many vital issues which had been put on hold during the EU referendum campaign and subsequent fallout. These include key infrastructure projects like airport expansion, HS2, energy security and the Northern Powerhouse as well as delivering on business rates pledges and changing plans for quarterly tax returns."

A statement from the British Chambers of Commerce (BCC) echoed the FSB's sentiments. It said: "Business people want Westminster to lead by example in the coming weeks. Bold decisions to progress key infrastructure and construction projects, guarantees for EU nationals working in British firms, and a commitment to seek the best possible terms of trade for the future would be an excellent start."

Meanwhile, the Institute of Directors (IoD) has already applauded Theresa May's commitment to improve the governance of big companies. Oliver Parry, the IoD's head of corporate governance, said: "How the UK's biggest companies are run is of central importance to the economy. The IoD has long argued that the leaders of large corporations have a responsibility to consider how their actions affect the general reputation of business. Theresa May has suggested some bold solutions, and the details will need to considered carefully, but the IoD agrees it is time to give shareholders more control over executive pay."

Image: smallmanlara on Flickr

More on this topic:

Business groups call for calm as EU storm rages NEWS
Business rates ARTICLE
Quarterly tax return plan criticised by watchdog NEWS

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UK growth was already "sub-par" before referendum

Fri, 15 Jul 2016 08:03:47 +0000

UK economic growth was "uninspiring" in the run-up to the EU referendum and many firms were in a "holding pattern", according to the latest British Chambers of Commerce Quarterly Economic Survey released this week.

The BCC poll is Britain's largest private sector business survey and is based on over 8,200 responses from firms in Q2 2016. These latest results provide a snapshot of how the UK economy was performing just before the EU referendum.

It shows that several key indicators were down or remained static. In particular, domestic and overseas sales in the services sector fell ahead of the referendum; manufacturing sales remained at what the BCC calls "an historically low ebb".

The key findings in the Q2 2016 survey are:

In manufacturing, the balance of firms reporting improved export sales rose to a percentage balance of +9 from +8; however, fewer firms reported an increase in advance orders (+5, down from +8 in Q1);
The balance of manufacturers reporting improved cashflow fell three points to +4, the lowest level since Q2 2013;
Fewer services companies reported an increase in export sales and orders (+11 and +13, down from +13 and +16 respectively);
The balance of manufacturing firms reporting an increase in orders fell four points to +9; in services this fell by one point to +20.
The balance of manufacturers confident that turnover would improve fell from +44 to +40 - the lowest level since Q3 2012;
The balance of service firms confident that turnover would improve remained unchanged at +44.

Dr Adam Marshall, BCC acting director general, said: "Even before the EU referendum, both business confidence and economic growth were softening in many parts of the UK. Our latest survey results, captured just before the vote, suggest that many businesses have been operating in something of a holding pattern for some time."

While it is too early to say what impact the referendum decision will have on most firms in the UK, said Marshall, "it is not too early for us to say what business wants to see: stability in markets, clarity in politics, and action on the issues that matter for growth."

More on this topic:

FSB: small business confidence at four-year low NEWS
How to take your small business into the big time ARTICLE
10 steps to... Growing your business CHECKLIST

Government focuses on climate change risks to SMEs

Fri, 15 Jul 2016 08:02:22 +0000

The Government has backed calls by the Federation of Small Businesses to tackle the threat to SMEs caused by flooding and other climate change events.

The Government's Committee on Climate Change has published a report that reaffirms the real and growing risk of climate change to small businesses, and warns that the risk of flooding must be addressed urgently.

The findings of the UK Climate Change Risk Assessment Evidence Report draws heavily from research by the Federation of Small Businesses (FSB) showing that two-thirds of small firms have been adversely affected by severe weather in recent years.

Mike Cherry, FSB national chairman, said: "This report recognises the great risk posed by flooding and extreme weather on small businesses. It also confirms the problems we have consistently identified with access to affordable small business flood insurance.

"Severe weather is expected to increase the severity and frequency of flooding, leaving vulnerable regions at real risk of greater damage and disruption. The economic fallout extends beyond those businesses who actually receive flood water through their doors. It disrupts supply chains, distribution channels and impacts whole communities."

FSB research suggests up to 75,000 smaller businesses at risk of flooding could currently struggle to find affordable flood insurance. However, small businesses are not covered by the new Flood Re agreement. According to the FSB, only 25% of micro-businesses have a resilience plan in place that specifically includes severe weather.

"Small businesses need to be empowered to improve their own resilience," said Mike Cherry. "That should be supported by bringing flood insurance premiums down to an affordable level. Flood risks must also be tackled and defences improved so that businesses have the confidence to remain at the heart of their local communities."

The UK Climate Change Risk Assessment Evidence Report analyses risks and opportunities to the UK from climate change and will inform the UK's second Climate Change Risk Assessment due out in early 2017.

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Export agency supports record number of SMEs

Fri, 15 Jul 2016 08:01:40 +0000

The UK's export credit agency, UK Export Finance, has supported more exporters than ever in the past year according to new Government figures.

UK Export Finance (UKEF) provided financial support and insurance for the largest number of exporters in 25 years, with a 23% increase since last year.

The majority of these exporters (77%) were small or medium-sized enterprises and an estimated 7,000 companies in exporter supply chains also indirectly benefited.

Altogether, UKEF supported more than £800 million in sales overseas through its SME-targeted trade finance products and it issued £1.8 billion in export support. The announcement comes a year into the Government's Exporting is GREAT campaign.

Lord Price, minister for trade and investment, said: "Exporting can help businesses grow - and grow fast. That means more jobs, more profits, more tax revenue and more benefit to society. By providing its innovative support to more exporters than ever before, UKEF is helping to make exports happen, playing a vital role in the whole-of-Government push for 100,000 new exporters by 2020."

Louis Taylor, UKEF's chief executive officer, said: "This year's results show that we are making significant progress in reaching a wider customer base. We will continue to be innovative and flexible, anticipating the needs of exporters and finding ways to meet them."

The UKEF is now developing a new digital interface to support customer applications that will become available in 2016-17.

Despite this news, the latest trade figures show that exports decreased by £2 billion and imports decreased by £1.7 billion between April and May this year.

Suren Thiru, head of economics at the British Chambers of Commerce (BCC), described the figures as "disappointing". He added: "While the significant decline in the value of sterling in the wake of the EU referendum will benefit some exporters in the coming months, a weak pound is something of a double-edged sword, as many UK exporters are also importers as a result of global supply chains and so will be facing higher input costs due to the weakening currency."

More on this topic:

Ten ways to improve your international marketing strategy ARTICLE
How to plan for exporting CHECKLIST
Understand legal issues for exporters BRIEFING

Also in the news this week - 15 July 2016

Fri, 15 Jul 2016 08:00:45 +0000

CMA says legal services firms are failing SMEs

An interim report from the Competition and Markets Authority (CMA) has identified problems in the legal services market for both small firms and consumers. It concludes that a lack of transparency of price and service makes it harder for users to compare providers and get value for money. According to the report, only 17% of legal services providers publish their prices online.

Professionals choose SMEs over larger employers

UK professionals are increasingly choosing to work for small firms and start-ups according to new data released by LinkedIn. It studied a sample of 3.5 million UK members from March 2015 to March 2016 and found a 16% increase in the number of people either working for a small firm (with fewer than 50 employees) or going self-employed themselves. The research also identified a drop of 14% in the number of people choosing to work for large corporates.

Waitrose pledges to pay small firms within a week

Waitrose supermarket is to pay its smaller suppliers within a maximum of seven days after receiving an electronic invoice as part of a move to simplify its payments process. More than 600 UK food producers will benefit from the change. Mark Williamson, Waitrose commercial director, said: "We are passionate about supporting and nurturing British producers - and this step will help give smaller scale businesses, including new start-ups, more financial stability by helping with cash flow."

Google searches for start-up stars

Google is looking for ten early-stage technology companies to take part in its week-long Campus Exchange: Best of British programme. Those chosen will be given space at Google's start-up workspace Campus London and will also get support and advice from mentors and investors. Applications are open until July 29 and the programme begins on 22 August.

Five reasons Poland could be your perfect IT outsourcing destination

guestbloggerITD — Mon, 11 Jul 2016 08:41:05 +0000

As a small business owner, it's very unlikely you'll be able to design all the software you need using your own in-house resources. There will come a time when you will need to consider outsourcing.

So, when you think about your perfect IT outsourcing partner, what do you look for? There are many issues to consider - cost and technical expertise are probably most important, but you will also need to think about communication, distance and travel cost. Mutual trust and reliability are also critical. But does your IT partner have to be local?

If you are familiar with the term off-shoring, you'll know it's the relocation of the business to a foreign country. In terms of IT development, off-shoring usually means outsourcing to Southeast Asia, North or South America.

Near-shoring, on the other hand, means your outsourcing partner is located on the same continent and is relatively close to you. Near-shoring is increasingly used by Western European companies as a way to outsource their software development to Eastern and Central European countries. The costs are much lower and the distance is not such a big issue. But which country should you consider?

If the quality of expertise and service are key factors for you, Poland could be your best option. Here's why:

1. Cultural similarities

Poland has been an EU member since 2004 and its economy has reached the maturity stage. Polish firms understand changing business needs and offer a process-driven approach. You'll work with people who share your business standards and you'll find them committed, goal-oriented and ready to build strong relationships with clients.

2. Cost effectiveness

Although Poland has one of the strongest economies in the region, IT specialist rates are at least 50% lower in Poland than they are in the UK.

3. Technology expertise

The majority of Polish software engineers are graduates of technology universities. Poland has a strong engineering education tradition and technical universities are very popular among students. Polish programmers have deservedly gained an excellent reputation within the industry.

4. Time difference and distance

Poland is in Central Europe and so it shares the CET with Germany, France and Italy. It is just an hour away from the UK. Travel is easy as there are many low-cost airlines and the list of destinations is impressive. Almost every major city in Poland has direct flight connections to the UK and Ireland. And you don't need visas.

5. Security and collaboration issues

As far as security is concerned, Poland shares security measures with other EU countries. English language literacy among professionals is common and advanced technology infrastructure makes long-distance communication easy.

So, if you are looking for a reliable IT outsourcing partner, try Poland. You'll be glad you did.

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Biggest start-up regrets revealed

Fri, 08 Jul 2016 08:04:02 +0000

UK small-business owners' biggest start-up regrets are not spending enough time on marketing and finances, according to a survey of 501 small firms by the Association of Accounting Technicians (AAT).

Almost a fifth (19%) of respondents wished they had spent more time on marketing when launching their business, followed by finding out about business finances (11%), IT (8%) and PR and social media (5%).

Two-thirds (65%) of respondents admitted to struggling with at least one key business area when starting their own business, mostly caused by not carrying out enough research, they admitted. More than a quarter (26%) said they started their business less than a month after researching their market.

Out of those who had tried to find business advice, about a fifth (19%) said they had used search engines such as Google, with slightly more (22%) going to an accountant and 11% visiting business advice websites, while 8% had approached business organisations such as the Federation of Small Businesses.

For many of the country's small-business owners, starting up wasn't a process that came naturally, with 27% saying it took them more than a year before they felt confident about running their own business. Perhaps more surprisingly, 4% of business owners admitted to not feeling completely confident when it came to running their business.

Rob Alder, AAT head of business development, commented: "Starting your own business can be a daunting process. This research shows that many people who want to run their own business may need more help when they're starting out.

"If you have a business idea, it's essential you do as much research as possible to ensure your idea has the best chance to succeed. You should get as much advice as you can, from multiple sources," he recommended.

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Small firms spend 10% of working day chasing payments

Fri, 08 Jul 2016 08:03:44 +0000

Research by cloud accounting software company Xero suggests small-business owners in the UK spend a tenth of their working day chasing unpaid invoices, while having to wait an average of 14 days for payment following due date.

More than half (52%) of business owners worry about unpaid invoices, and the problem is most acute in London, where firms spend about one and a half days a month chasing payments, followed by Wales, where 1.3 days a month are spent on this task.

HR was the sector where most time is wasted chasing payments (three days), far more than IT & telecoms (1.8 days) and manufacturing & utilities (1.7 days), according to the research.

The two main reasons why small businesses said they were being paid late was their customers themselves having to wait for payments (32%), as well as "lack of consistency on payment terms" (27%).

More than a third (37%) of respondents identified reduced productivity as a consequence of them having to wait for payment, as well as cash flow problems, losing money and other work building up because time was being spent chasing unpaid invoices.

"Nearly 60% of all UK small-business invoices were paid late in 2015, which can cripple and often close a business within its first few years,” said Emma Jones, founder of business community Enterprise Nation.

"The late payment epidemic the UK is facing has to change, so that small businesses don't spend so many hours chasing doubt and worrying about cash flow [as a result of] late payment. With small businesses making up 99.8% of the British economic engine, this is a critical issue to sort out for the betterment of the UK economy as a whole."

Gary Turner, co-founder and UK managing director of Xero, says: “The UK has a dismal productivity rating compared to the rest of the G7 nations. Our recent research has proved that small businesses are continuing to waste time chasing payments, only adding to the problem with productivity we face in this country."

To help small businesses avoid cash flow problems caused by late payment, Turner recommends invoicing promptly. "The sooner you invoice, the sooner you'll receive payment. It's vital to get your invoicing process right from the start so that it is efficient," he comments.

Turner also recommends that business owners and managers introduce themselves to those responsible for payment at the companies they are invoicing. He also advises small firms to maintain accurate financial records, to have shorter credit terms where possible and to make it as easy and convenient as possible for customers to make payments.

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SME groups forge Brexit partnership

Fri, 08 Jul 2016 08:02:23 +0000

Nine key SME representative organisations plan to work together to make sure small-business interests are represented, as the UK begins the process of exiting the EU.

The Federation of Small Businesses (FSB), Enterprise Nation, National Enterprise Network, Open to Export, IPSE (Association of Independent Professionals and the Self-employed), The Entrepreneurs Network, the Institute of Chartered Accountants, England and Wales, British Library Business and IP Centre, and Coadec (the Coalition for a Digital Economy) will coordinate their efforts in the interests of UK SMEs and start-ups.

Emma Jones of Enterprise Nation said: "It's more important than ever for entrepreneurs to maintain optimism and look forwards, not backwards. The worst thing we can do is talk ourselves into a recession, when formal negotiations leading to exit will take at least two years.

"Inevitably there will be new opportunities and there are things businesses can do to protect themselves from changes that might affect them in the short term and in the future. We have come together to make sure small businesses can easily get hold of the information and advice they need during the current period of uncertainty."

Mike Cherry, FSB national chairman, said: "FSB will work with government and others to ensure the UK's 5.4m smaller firms get the best deal for them to do business. At this week's business summit chaired by business secretary Sajid Javid, I stressed the need for immediate action to ensure economic stability, to ensure small businesses can continue to trade. Smaller firms need simple access to the single market, the ability to hire the right people, continued EU funding for key schemes and clarity on the future regulatory framework.

"When the negotiations start, FSB will be a constructive partner and a strong voice, working with other entrepreneur groups and pushing for swift clarity on these crucial points."

Simon McVicker, director of policy and external affairs at IPSE, stated: "Now we are leaving the EU, IPSE believes the priorities should be new global trading arrangements, cutting burdensome regulation on small and micro businesses and ensuring that Britain has the most flexible and attractive economy in the world."

Clive Lewis, head of enterprise at ICAEW, commented: "While there have been no negotiations following the UK vote to leave the EU, the financial markets are already adjusting to the new situation. It is likely that foreign currency movements could affect small business trading position through either sales revenue or costs, so it is more important than ever to monitor financial performance."

Philip Salter, founder of The Entrepreneurs Network, said: "The Entrepreneurs Network is calling on the current and next government to strike a deal that's best for Britain, and that means causing as little damage as possible to the free movement of goods, capital and people, which means staying in the Single Market.”

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FSB: small business confidence at four-year low

Fri, 08 Jul 2016 08:01:40 +0000

Small business confidence in the UK is at its lowest level in four years, according to the Federation of Small Businesses (FSB), evidenced by the largest annual fall in the organisation's Small Business Index (SBI) since the survey began in 2010.

The most recent SBI survey was based on responses from 1,104 members of the FSB Big Voice survey community. They were asked for opinions on key economic indicators including business confidence, employment and wages, exports, productivity, spare capacity, finance and investment.

The SBI found that, for a second consecutive quarter, many small firms were planning to reduce their workforce. Respondents reported that falling profits with increased labour costs and "the overall tax burden" were major causes of rising operating costs.

Just 12.2% of respondents are planning new capital investment in the next 12 months - significantly less than the 31.9% planning the same just one year ago, despite improvements to credit availability and affordability.

Mike Cherry, FSB national chairman, said: "Even before the EU referendum result, our members were reporting tough business conditions across the country. While the referendum result has settled the question of UK membership of the EU, there are many questions left unanswered. While these remain, we must take steps to shore up the economy and support UK small businesses.

"We need ministers to take stock and roll back any plans which will make doing business more difficult or costly. This should include ending moves to introduce disruptive digital tax reporting and honouring commitments to expand small business rate relief. The Low Pay Commission should be especially vigilant when recommending next year’s National Living Wage rate, taking extra care to ensure small businesses can sustainably support higher wages at this challenging time.

"For the first time since 2009, the UK economy faces a real chance of a recession. To head this off, we need to do everything we can to support small firms to grow, create jobs and weather the harsh economic headwinds."

The sharpest fall in confidence was in London, which, according to the FSB, “dropped into negative territory for the first time since 2012”. Scotland also showed negative numbers - the second consecutive quarter this has happened. The most optimistic regions were the North East and Yorkshire and Humberside, although an overall drop in confidence was evident even in these areas.

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Also in the news this week - 8 July 2016

Fri, 08 Jul 2016 08:00:10 +0000

Firms flouting National Living Wage rules

An investigation by Channel 4's Dispatches has found that some UK employers are ignoring their legal obligation to pay the National Living Wage (NLW). Are You Owed a Pay Rise? looked at the price some low-paid workers are paying as a result of the introduction of the NLW, for example, by losing overtime, having perks taken away or even being made redundant because they are aged over 25. The worst employers are ignoring NLW rules altogether. Employees aged 25 or over who are not in the first year of an apprenticeship are entitled to at least £7.20 per hour. The government is warning employers that NLW rules will be enforced as strongly as the National Minimum Wage.

Almost half of managers can’t handle a crisis

According to Bouncing Back: Leadership lessons in resilience, a report published by the Chartered Management Institute, only 55% of business managers believe they are able to handle crises at work professionally, despite 94% having faced crises during their career, with 78% blaming a lack of support from senior management and 68% citing "culture failure" as responsible. The most common workplace crises were significant conflict with a colleague (54%), unfair treatment (49%) and project failure (36%), with 81% of managers admitting that it had damaged their confidence and 63% saying their capacity to do their job was impaired.

The Insolvency Service issues company accounts warning

Following recent seven-year disqualifications, the Insolvency Service is reminding company directors of their legal obligation to maintain accurate accounts. A West Midlands company director was recently found guilty of manipulating the company’s computerised records system by increasing debtors by more than £100,000, which was later discovered when the company was sold. Susan MacLeod of the Insolvency Service said: "Directors have a duty to ensure that their companies maintain proper accounting records. The Insolvency Service will take action against directors who do not take their obligations seriously and abuse their position of trust."

BoE issues guidance on new polymer £5 notes

The Bank of England has published guidance to help retailers verify the new £5 polymer bank note, which will enter into circulation on 13 September 2016. Featuring Sir Winston Churchill on the reverse side, the new £5 note will be 15% smaller than the current version, and printed on polymer, a thin, flexible plastic material which is more durable. The new notes will feature a range of advanced security features to make them more difficult to counterfeit. Withdrawal of the paper £5 from circulation is expected by May 2017. The new polymer £10 note (featuring novelist Jane Austen) will be issued in summer 2017, and the new £20 note (featuring landscape painter JMW Turner) will be issued by 2020, says the Bank of England.

Can you run your business entirely online?

guestbloggerITD — Mon, 04 Jul 2016 13:38:33 +0000

The digital age has made it easier than ever to run a business, with everything you could ever possibly need just a click away. At the same time, environmental concerns are rising, with more businesses aiming for a paperless office to reduce their impact. But do we even need an office any more - or is it possible to run your entire business online?

Obviously, it all depends on the nature of your business - a hairdresser, for instance, isn't going to be able to offer virtual haircuts - but assuming that your business model allows it, it's surprisingly easy to go virtual.

Get started online

Let's start at the beginning. When you first set up your business there was lots of paperwork to file, right? Well no. In fact, setting up a limited company is not only quicker online than by post, it's also cheaper. If you file by post, it can take 8-10 days and cost £40 to register with Companies House. Go online with a formations agent and you can have it done the same day, and depending on the package you choose it could cost less than half that price.

Once your business is up and running, you can also file things like your annual returns and company accounts online.

Take advantage of the cloud

Cloud-based software is rapidly becoming the norm for many applications. Most small businesses are already moving towards online accounting solutions, and as the applications are tested and improved, more sizeable businesses will be able to follow suit.

Cloud-based spreadsheet, word processing and database applications make it easy for staff to collaborate without ever needing to be in the same room, and if they need to communicate face-to-face, a video conference can be conducted online. As more businesses move towards the cloud, digital security for these applications is constantly being improved.

Build an online presence

With a good website as your digital doorstep, backed up by a strong presence on social media sites like Facebook and Twitter, your customer interactions can be quick and easy. Email and instant messaging allow for easy communication, and for customers who like to speak to a "real person" you can implement VOIP systems to take their calls.

Can your products or services themselves be delivered digitally? If so, then you really can have a business that's entirely online. Just make sure that your internet connection can take the strain.

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Energy reforms are "big win" for small businesses

Fri, 01 Jul 2016 08:05:11 +0000

The Federation of Small Businesses has welcomed the decision by the Competition and Markets Authority to reform the UK energy market.

Mike Cherry, the national chairman of the Federation of Small Businesses (FSB) said: "Today's CMA decision is a big win for FSB and for small businesses up and down the country. Transparency and fairness should be at the heart of a functioning energy market for small firms."

The FSB has campaigned to bring more transparency to the energy market. Now the CMA has decided that comparable tariffs should be published. This, said the FSB, "will make it easier for micro-businesses and sole traders to quickly compare energy prices and choose the best contracts".

The CMA recommendations also bring an end to unfair auto-rollovers. While many energy companies have voluntarily removed restrictive auto-rollovers, today's decision will guarantee businesses are not automatically locked in to further fixed-term contracts against their will.

Mike Cherry said: "A third of small firms highlight the cost of energy as a barrier to the growth and success of their business. Energy tariffs, published in a clear and comparable way, will make it much easier for small firms to secure a decent energy deal and empower them to make decisions that are right for them. Removing unfair terms and conditions from auto-rollovers will also ensure business owners are not caught off-guard when their contract expires.

"Bringing fair and transparent energy deals for the UK's 5.4 million small firms will inevitably bring more jobs, increased revenue and improved productivity to the UK as a whole," he added.

However, the FSB has said that it is disappointed that the CMA has not addressed concerns around the regulation of third party intermediaries (TPIs). The FSB said: "TPIs offer a valuable service to smaller firms, but some rogue TPIs are undermining the industry as a whole. TPIs need to be regulated so that businesses are not discouraged from using their services to gain more competitive energy deals."

This issue now falls to energy regulator Ofgem. The FSB will be supporting Ofgem as it works toward a code of practice for non-domestic TPIs.

Mike Cherry added: "Third party intermediaries can be incredibly helpful to small businesses searching out fair energy deals. But there is a lack of trust in the industry, partly caused by some TPIs who cut corners or act unethically. This market failure must be addressed as soon as possible. FSB would like to see a regulatory framework for TPIs developed by Ofgem within the next year."

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Business groups call for calm as EU storm rages

Fri, 01 Jul 2016 08:04:38 +0000

The UK's major business groups are calling on the Government to minimise uncertainty as the fallout after the EU referendum continues.

Writing in The Times this week, CBI director-general Carolyn Fairbairn said: "The impact [of the referendum] cannot be underestimated and will take time to understand. Many people, including the UK's thousands of businesses, are asking what this means for them and the people who depend on them. What we need is a plan. The Government must act with urgency to minimise the uncertainties that affect investment decisions and slow job creation."

Fairbairn has called for the Government to seek to "protect tariff and barrier-free access to the Single Market, ensuring companies are able to continue to attract the best people to the UK with the skills we need, while recognising public concerns about immigration".

Dr Adam Marshall, acting director general of the British Chambers of Commerce (BCC), said: "Businesses across Britain want a steady stream of communication from the Government and the Bank of England, with stability, clarity and action the watch-words for firms.

"So far, the priority for the chancellor and the governor has rightly been the question of stability, as markets and firms digest the electorate's decision. However, attention swiftly needs to turn to delivering clarity. While it is prudent for the UK Government to delay firing the starting gun on negotiations with the European Union, firms want a clear timetable, and simultaneous action to support the wider economy."

The Federation of Small Businesses (FSB) is urging the Government to focus on the needs of the UK's small businesses. Mike Cherry, FSB national chairman, said: "I will continue to push for immediate action to reassure small businesses so they can continue to trade and do business. Smaller firms need simple access to the single market, the ability to hire the right people, continued EU funding for key schemes and clarity on the future regulatory framework. This is crucial to ensure economic growth and job creation."

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Could your firm benefit from a summer shutdown?

Fri, 01 Jul 2016 08:03:50 +0000

One in six English employees would welcome the chance to have a fixed annual summer holiday while their place of employment closed down according to a new survey.

The summer shutdown, or what was once called the "factory fortnight", could be in vogue again as business owners struggle to manage during quiet periods and cover staff holiday leave at other times.

The poll, conducted by virtual assistant service providers Ava, found that 59% of English workers were in favour of the move; in sharp contrast, 68% of those in Northern Ireland were against it. In addition, women were more likely to back the idea than men - with 63% of women supporting the idea compared to 44% of men.

According to the researchers, many respondents felt that by shutting up shop during traditionally quiet periods, businesses would remain more productive and cost-efficient overall.

Some businesses are already adopting the practice. For instance, construction firm JCB closes its Rocester factory each summer for up to three weeks, in a bid to cut back on expenditure and give staff a designated period to take a paid holiday.

In addition, TED, the global talks organisation, closes for two weeks in August. And an article by Karina Robinson in the Financial Times in 2015 said that the best way to boost the nation's productivity would be to "cancel August".

Lucie Greenwood, sales manager at Ava, said: "Regardless of a company's size or profit margins, a decrease in performance and income can be a very stressful time. However, it's these periods in which you have the most time on your hands to take a step back and really look at how you work as a business. When you're flat out and the money is pouring in, it's very easy to assume everything is fine - when in fact there may be many aspects of your operations that can be improved."

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Brexit will hit international traders hardest

Fri, 01 Jul 2016 08:02:21 +0000

Exporters and importers, including many small businesses, will suffer most after Brexit according to international shipping providers.

The impact of Brexit on small businesses will fall hardest on those that export and import, Simon Cowie, chairman of Mail Boxes Etc, has said. His comments are echoed by a spokeperson from ParcelHero.

Cowie said: "Although a trading deal with the EU is likely, there is a lot of ignorance about the benefits the single market brings small businesses. Currently, importing and exporting goods to the other 27 members is almost as straightforward as sending goods from London to Newcastle. In future, companies will have to generate Commercial Invoice documentation (in triplicate), face customs inspection and associated delays and, in many cases, pay additional duties and freight forwarding bills."

Cowie said it is likely that carriers will increase shipping charges to cover their own increased costs. "It currently costs businesses about 50% more to send packages to non-EU countries such as Norway and Switzerland compared with similar countries inside the single market. I am concerned for our customers who will need help in negotiating the minefield of exporting once Brexit becomes a reality."

Meanwhile, international courier ParcelHero has called on the Government to secure access to the Single Market and avoid imposing new tariffs following Brexit.

David Jinks, ParcelHero's head of consumer research, said: "We are concerned for our customers about the possibility of increased costs in sending parcels to the EU and also receiving items from the Union."

He said: "ParcelHero regularly ships to those countries that are in Europe but not in the EU, such as Switzerland, Norway and Iceland. Parcels sent to these countries face customs delays, red tape and tariffs of between 5-9% on average. We hope that the UK will not find itself with similar customs charges and paperwork. It is our hope that negotiations between the UK Government and Brussels will ensure that the EU will not impose new tariffs on British goods shipped into the EU; and that similarly the UK Government will not seek to impose tit-for-tat tariffs in return."

Jinks added: "ParcelHero does not foresee any price rises for its popular EU services while the UK's future relationship is hammered out; and it will seek to protect its customers from any increased costs in the long term."

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Also in the news this week - 1 July 2016

Fri, 01 Jul 2016 08:01:12 +0000

Businesses not ready for Brexit

A snap poll conducted this week for the CIPD's People Management newsletter has found that only 5% of respondents said their organisation had a post-Brexit plan in place; 78% felt they lacked the information to make long-term organisational decisions. However, around a fifth were actively working on a strategic plan and 16% were specifically focusing on securing their non-EU workforce. The survey also found that 54% of HR professionals thought that Brexit would either weaken or significantly weaken their ability to acquire and retain skilled individuals.

Meet the social influencers

One in ten Britons agree that social media influences them every day, according to a poll by Affilinet. In addition, 48% of those polled said that knowing a post was sponsored would make no difference to their trust in it. Helen Southgate, UK managing director at Affilinet, said: "Social media influencers are the next big thing ... Already, we are seeing far more sponsored and promotional posts and, while there has been some backlash in certain instances, providing the sponsoring brands are relevant to the audience and authentic to the account, they are generally very well-received by the followers."

Providing PSC information to Companies House

As from 30 June, every UK company and UK registered LLP now needs to notify Companies House of the information on its PSC Register (or why it is exempt from having one) when it files its Confirmation Statement. The Confirmation Statement replaces the previous Annual Return. A PSC Register must be kept by all UK companies (other than exempt listed companies); it identifies and provides information about individuals and entities that qualify as having significant control of the company.

Understanding the legal implications of Brexit

Global law firm CMS has launched a microsite, Brexit Next: Legal Implications, to keep businesses updated on business law developments as they happen. It says a "successful Brexit will involve disentangling the UK from complex politico-legal, financial and other relationships and obligations". The new micro-site will provide updates on what Brexit could mean for business owners as legislation changes.

Five tech essentials for start-ups

guestbloggerITD — Mon, 27 Jun 2016 09:21:44 +0000

Launching a start-up is no mean feat. There are so many important decisions to make that will dictate how your business will operate and how successful it will become.

With this in mind, we've created a list of the top five essential pieces of tech for start-ups. After all, you need the best technology out there to give your business the best chance of succeeding.

1. Website and social media

To get your start-up on the road to success, a strong website is a must. In the age of social it has never been so important to establish an online presence in your market.

A well-designed, user-friendly site will help generate leads, drive engagement and increase brand awareness. It's an extremely effective way to showcase your business and what makes you unique.

You should also set up accounts on social media platforms to share company news and insights and build your audience. Use your blog and social media channels to tell your start-up story; involve your audience in every stage of your exciting journey.

2. A virtual phone number

A virtual phone number will give customers, clients, leads and press a point of contact for enquiries, so make sure that setting this up is high on your business to-do list.

Once your website is live it's worth implementing call tracking so that you can see which areas of your site are performing the best and which need tweaking. You might also want to consider adding a unique number to your offline material in order to track performance of all aspects of your marketing efforts.

3. Google Analytics

Once your website is up and running, it's time to think about setting up tracking. Google Analytics is a great tool that allows you to monitor your site's performance, discover your most popular content and identify any areas for improvement, such as basket abandons. Google Analytics will enable you to identify your key audience, improve the user journey of your site, boost its performance and enhance your revenue stream.

4. Software and hardware

You'll need the basics - a laptop, mobile phone and tablet - to get started. If you're planning to handle transactions, you'll also need a card reader to hand.

Once your business starts to expand, you can add to your tech collection. In the meantime you may find that renting your IT equipment is the most cost-effective option when you're starting out. That way you can hire it as and when you need it without investing in pricey devices.

5. Data back-up

It's vital to back up your data so that all your hard work doesn't go to waste. There are data back-up solutions for businesses of all sizes to suit a number of needs, ranging from data storage on third-party or external hard drives, to using cloud services such as Dropbox. If you decide to go down the cloud storage route, it's worth checking whether you can access your data on the go, so that you can work from anywhere in the world as long as you have a decent Internet connection.

Got all you need?

If you're starting up as a new company, be sure to check that you've got these key pieces of tech in place at the earliest stage possible.

Having access to this technology will help to set your business on the right track and ensure that all your marketing efforts don't go to waste.

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Britain to exit EU - business groups react

Fri, 24 Jun 2016 09:56:59 +0000

It has been revealed that after 43 years of membership, Britain will exit the European Union following Thursday's referendum. The decision was backed by 52% of voters, with 48% voting to remain.

The referendum saw more than 30 million people voting, a turnout of 71.8% - the highest at a UK election since 1992.

News of the exit has led to a sharp drop in the value of the pound this morning, showing a fall of 7% against the euro as markets opened. Prime minister David Cameron, who led the Remain campaign, also announced his resignation in light of the result, stating:

"I will do everything I can as prime minister to steady the ship over the coming years and months, but I do not think it would be right for me to be the captain that steers our country to its next destination."

Predictions proved wrong

Even up until the polls closed yesterday, the result was judged to be too close to call by many. Pre-referendum surveys by small business groups had suggested a narrow victory for the Remain campaign. A survey by the British Chambers of Commerce (BCC) in May indicated that 54% of its members would vote for the UK to remain in the European Union.

However, that survey showed an increase in support for Leave (37%) since its February poll, which had Remain on 60%, Leave on 30%, and 10% saying they didn't know.

'Period of volatility'

The effects of today's result for businesses are unclear at present, and look likely to remain so in the coming days and weeks. Professor Stephen Roper, Director of the Enterprise Research Centre, gave his thoughts: "Small businesses need to prepare for a period of volatility as markets react. Over the next few weeks a weakening of sterling will help exporters, but will make euro imports more expensive. Interest rates too may need to rise, raising business borrowing costs.

"The gains for small firms from Brexit are probably two to five years away. There is potential for reduced regulation and new trade deals, but the timing and effects of both remain uncertain."

Brian Palmer, AAT Tax Policy Adviser, agreed: "We will see changes happen very slowly, nothing will change overnight. Existing laws, even those fulfilling EU obligations, will continue while the UK remains a member of the EU with at least a two year window to negotiate the exit."

Calls for reassurance

Following the result and prime minister David Cameron's subsequent resignation, business groups are calling for the Government to provide urgent reassurance and stability for the UK's firms.

Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), called for: "…clarity on what these decisions now mean for business, including how businesses will have access to the single market and the free movement of people and trade."

BCC acting director general Dr Adam Marshall warned: "All companies will expect swift, decisive, and coordinated action from the Government and the Bank of England to stabilise markets if trading conditions or the availability of capital change dramatically. Firms across the UK want an immediate and unambiguous statement on next steps."

Simon Walker, Director General of the Institute of Directors (IoD), said: "It is now imperative that our political leaders manage the transition as smoothly as possible. The weeks and months ahead are going to be a nervy time for business leaders."

Adapt and survive

With uncertain times ahead, it remains to be seen how Brexit will affect British businesses both in the short and the long term. But many are sounding a positive note. Carolyn Fairbairn, CBI Director-General, said: "The British people's vote to leave the EU is a momentous turning point in our history. The country has spoken and it's for us all to listen.

"Many businesses will be concerned and need time to assess the implications. But they are used to dealing with challenge and change, and we should be confident they will adapt."

Simon Walker agreed: "British businesses are resilient and, with their characteristic ingenuity, they will weather this storm."

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Entrepreneurs underestimate start-up admin costs

Fri, 24 Jun 2016 08:04:00 +0000

The average small business spends more than £22,000 on administration in its first year, according to new research; but many new entrepreneurs underestimate these costs.

A new study from online business service Geniac reveals the average start-up invests £22,756 in its first year to cover essential business administration costs, including accountancy, company formation, HR and legal services. Yet those thinking of starting a business underestimate these expenses by £2,525 on average.

The largest business administration outlay is associated with company formation, including company set-up, drafting articles of association, board minutes and shareholdings. This costs an average of £6,378 or 28% of the total amount.

However, the cost that would-be entrepreneurs are most likely to underestimate is accountancy fees; the research found that on average, respondents had budgeted £1,723 too little for accountancy costs in their first year.

Geniac's study shows that 64% of small business owners say they have been hit with unexpected costs, the negative consequences of which include profit losses (23%); being forced to readjust growth targets (21%); and having to let staff go in order to free up funds (7%).

Mike Galvin, co-founder of Geniac, said: "It's concerning that start-ups and small businesses are not only losing profits and staff but are readjusting growth plans because they've underestimated the cost of starting up. It's even more worrying that they are over-paying in nearly every area of business administration - in nearly every part of the country."

Start-up administration costs vary significantly across the country, according to the research. The average London business spends £30,211 on essential business administration in the first year while businesses in Wales are able to run at less than a third of the cost at £8,096.

After London, the most expensive places to set up a company are the North East, the North West, Scotland and the South West.

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Worries about ROI dampen SME marketing plans

Fri, 24 Jun 2016 08:03:16 +0000

The majority of small business owners believe marketing is essential but concerns about costs and measuring return on investment are holding some firms back.

New research from Royal Mail MarketReach shows that 81% of UK SMEs believe marketing is critical or essential to their business growth; and 37% say it is the primary driver of their business.

Nearly three-quarters (72%) of SMEs invest up to 20% of their turnover on marketing and use an average of 3.5 media channels to promote their business.

The most popular channels for SME marketing are email (82%), social media (62%), online advertising (50%) and direct mail (46%). Only 16% of small firms currently use search marketing and 7% use telemarketing.

However, the research has found that some small business owners are wary of using new channels because of worries over costs and, most of all, getting a return on their investment. Capacity to handle customer responses as a result of marketing activity is the third most widespread concern, followed by worries over lack of expertise.

Researchers also questioned respondents on what they want to achieve with their marketing activity. Two-thirds (66%) of small firms are looking to acquire new customers, 46% want to build stronger relationships with their existing customer base, 31% said they are looking to sell through more channels and 24% want to expand internationally.

Jonathan Harman, managing director of Royal Mail MarketReach, said: "Our research shows how important marketing is for UK SMEs. It helps them grow by acquiring new customers and building better relationships with their existing ones. But it is clear that lack of knowledge, fears about cost and concerns about measuring their returns could be holding them back."

The findings of the research have been published in a new guide, Smart Marketing for Small Businesses. Royal Mail has recently launched a new online marketing tool, MailshotMaker.

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Asset-based borrowing hits record high

Fri, 24 Jun 2016 08:02:45 +0000

The amount of finance secured by UK businesses against hard assets such as inventory, machinery and property has increased by 7% in the past year.

Asset-based borrowing has gone up from £3.38bn to £3.63bn, according to the Asset Based Finance Association (ABFA), based on comparing the figures in Q1 2015 and Q1 2016.

Most asset-based finance (80%) is invoice finance, in which businesses secure funding against their unpaid invoices; 20% represents the fast-growing area of asset-based lending, where businesses raise funding secured against a range of other assets they own, including inventory, property and machinery.

The ABFA reports that UK businesses secured £358m specifically against plant and machinery in Q1 2016, an increase of more than a third (37%) in a year, up from £261m.

There has also been an increase in the amount of business finance secured against property, with businesses borrowing £146m in Q1 2016, 14% more than the £128m borrowed against property in Q1 2015.

Jeff Longhurst, chief executive of the ABFA, said: "UK businesses now have a greater understanding of how their assets can be used to unlock capital. They are successfully investing this into the growth of their business, whether that be increasing headcount or expanding their order book.

"More businesses are benefiting from using asset-based lending and securing finance to fund growth plans. Borrowing against assets has now become a more mainstream option for businesses of all sizes looking to unlock funding and fuel growth."

The ABFA, in association with the British Business Bank and ICAEW Corporate Finance Faculty, has launched the new Business Finance Guide and interactive website to make it easier for businesses to identify the most appropriate funding solutions.

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Small businesses bear the brunt of cyber crime

Fri, 24 Jun 2016 08:01:10 +0000

A new report from the Federation of Small Businesses has found that small firms are unfairly carrying the cost of cyber crime in an increasingly vulnerable digital economy.

The FSB report, Cyber Resilience: How to protect small firms in the digital economy, suggests smaller firms are collectively attacked seven million times per year, costing the UK economy an estimated £5.26 billion.

The vast majority of small firms (93%) have taken steps to protect their business from digital threats; however, 66% have been a victim of cyber crime in the past two years. Over that period, those affected have been victims on four occasions on average, costing each business almost £3,000 in total.

The report finds that cyber crime costs small businesses disproportionately more than big businesses when adjusted for organisational size. Currently the responsibility largely falls on small businesses to protect themselves. The FSB is calling for more support to be given to those smaller firms that are least able to bear the burden of the cyber threat.

Mike Cherry, FSB national chairman, said: "Smaller businesses have limited resources, time and expertise to deal with ever-evolving and increasing digital attacks. We're calling on Government, larger businesses, individuals and providers to take part in a joint effort to tackle cyber crime and improve business resilience."

The types of cyber crime most commonly affecting SMEs are phishing emails (49%), spear phishing emails (37%) and malware attacks (29%). Four in five small firms (80%) use computer securing software and 53% perform regular updates of their IT systems.

However, the FSB report also found room for improvement - just 24% of smaller businesses have a strict password policy, only 4% have a written plan in case of online attack and just 2% have a recognised security standard such as ISO27001 or the Government's Cyber Essentials scheme.

Almost all (99%) of the UK's 5.4 million small firms rate the internet as being highly important to their business, with 66% either offering, or planning to offer, goods and services online.

Mike Cherry said: "Small firms are understandably focused on building their businesses and creating the jobs which drive economic growth. The responsibility for improving resilience should not be left to the group with least resource to do something about it. Without a concerted effort to reduce cyber crime and improve resilience, small businesses could be at real risk."

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Also in the news this week - 24 June 2016

Fri, 24 Jun 2016 08:00:13 +0000

Instagram passes the 500 million users mark

Instagram, the image sharing social media app, now has more than 500 million users worldwide. More than 300 million of its customers use the app every day and an average of 95 million photos and videos are posted every day. More than 80% of its customers come from outside the United States. Instagram was bought by Facebook in 2012. Since then, according to the BBC, Instagram has "rocketed past Twitter". Snapchat, the other fast-growing image sharing app, has 100 million users.

One in ten female workers plan career change within a year

Over a quarter (27%) of female workers are considering a career change in the next ten years according to a new study by Oxford Open Learning Trust; and 11% plan to make a move within the next year. The research shows that 24% of female workers would consider training or retraining for up to a year for a new role. The top five priorities for female workers in their current job role are working hours (57%), location (49%), salary (47%), personal interest/enjoyment (42%) and job security (34%). But for planning a move, salary is the most important factor for 66% of respondents.

Small firms ahead of the curve on technology

SMEs are outpacing big companies when it comes to adopting new technology, according to a new study from Unify entitled The Way We Work. The survey of over 5,000 knowledge workers in the UK, US and Germany found that 60% of SMEs now use on-demand tools, internet or cloud-based technology in their day-to-day operations. Thomas Veit, general manager, channels, EMPAC at Unify said: "The Way We Work Study has confirmed what we have known for some time: growing businesses are more open to trying new technology. It has also established that knowledge workers are defining how, when and where they do their jobs and [SMEs] are taking notice."

Late payments is biggest problem for micro-businesses

Late payment is the single biggest issue affecting micro-businesses, according to research from accountants Crunch, outranking cash-flow management, IR35, office space and recruitment. Darren Fell, ceo of Crunch, said: "The culture of late payments is now well and truly out of control - and the people bearing the brunt of the issue are the country's smallest firms. We regularly hear from micro-businesses who are in dire financial straits, simply because they are waiting on an invoice with 90 day or more payment terms from a huge company."

SMEs searching for staff with skills not degrees

Fri, 17 Jun 2016 07:10:08 +0000

Small business recruiters are looking for specialists in social media, online marketing and coding; and many say degrees are not important.

New research for eBay, conducted by YouGov, has found that seven out of ten small business recruiters say that a degree is "unimportant" when it comes to job candidates and most are looking for practical skills instead.

The Employee Skills Index from eBay shows that 61% of small business bosses favour candidates who have a strong grasp of marketing and advertising; 51% place importance on a candidate's ability to use social media and 56% are looking for recruits with digital skills. In addition, 41% of SMEs are looking for specialist capabilities such as coding.

The research also reveals that age is no barrier for new hires as small business employers say they are mostly focused on experience. The poll found that 56% of small business employers are agnostic about age when they are recruiting.

Small businesses provide jobs for more than 15.6 million British workers; the latest data from eBay suggests that one in three SMEs plan to hire in the months ahead.

Tanya Lawler, vice president at eBay UK, said: "The nature of business, especially online retail, is changing rapidly. Our business-savvy SMB community is on the look-out for versatile talent - regardless of age, background or gender - with the personable skills and life experience to help them develop and grow."

Commenting on the report, Karl Baxter, founder of Dorset-based firm Wholesale Clearance UK, said: "Being social media savvy is now intrinsic to all of this because the entire nature of word-of-mouth has been changed by new media. Even a packer in the warehouse has to understand that the presentation in the box they are packing could have an on-going social media impact with pictures being taken and shared with the world."

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Have you been asked to work for free?

Fri, 17 Jun 2016 07:08:55 +0000

Over half of all micro-business owners are asked to work for free at least once a year according to new research.

Nearly two-thirds (63%) of UK micro-business owners have been forced to work for free at some stage in their career just to get a foot in the door, according to new research conducted by OnePoll for the micro-business organisation Chorus.

A further fifth of entrepreneurs are approached to work for free every month and over half (53%) are asked to work for nothing at least once a year.

A quarter of those surveyed (27%) said that working for free was a "necessary step" when starting a business. However, 25% said they would never work for free, while one in five (20%) said they had worked on free projects but thought it was unfair.

Micro-business owners said that large corporations and charities were most likely to ask them to work for free.

Jason Kitcat, micro-business ambassador for Chorus, said: "Micro-businesses are a key driver of the UK economy, keeping the wheels of innovation and entrepreneurism turning - yet this research shows their skills are being undervalued and exploited.

"Micro-businesses employ 8.4 million people and account for 96% of all British businesses, yet too often they are being taken advantage of, on the promise of future publicity and business. Working for free shouldn't be necessary, the time and effort of micro-businesses should be valued like any other."

The number of people starting their own business continues to rise, according to new data from freelance body IPSE (the Association of Independent Professionals and the Self Employed). According to IPSE, the number of independent professionals in the EU rose by 24% (from 7.7 million to 9.6 million) between 2008 and 2015.

Chris Bryce, IPSE ceo, said: "Right across the EU, huge numbers of people are seeing the benefits of being their own boss and they're finding the confidence to launch new businesses. The trend towards working this way looks set to continue well into the future."

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