http://www.idealfinancesolutions.co.uk The Website for finding Ideal Finance Solutions en john.jackson@flgmoney.co.uk Copyright 2009 2009-01-06T16:57:00+00:00 http://www.idealfinancesolutions.co.uk/finance/feature/innovative-ways-of-raising-money-for-your-business/ http://www.idealfinancesolutions.co.uk/finance/feature/innovative-ways-of-raising-money-for-your-business/#When:16:57:00Z When times are tough, or in fact, at any time really, it is worth considering some less traditional methods of raising money for your business. There are many things that could be done; you just might not have thought of them. One idea would be to hold an event at your place of business.  There are a number of different events that you could host. The event may raise cash itself or it may in fact just be a way of creating exposure for your business. Either way, it should generate revenue for the company in the long run. Exposure is one way of really trying to improve your situation. A charity event could quite possibly generate interest from online and offline publications thus increasing exposure to your target customer. Events are dependent on your type of business. If your business wouldn’t be conducive to an event then there may be other things you can do. For instance, you may not have presented your business at a trade show before. This could be a real boost to business and again creates a lot of exposure. These ideas are less conventional but quite possibly worth trying. However, if you want to experiment with more common methods then it would definitely be advisable to discuss your options with a professional. Investors, banks and venture capitalists are your obvious choices but decisions made by these bodies are often dependent on the state of the wider economy. If you are willing to try and innovate with the way in which you try to raise money then you will not open your business up to rejection or additional risk. 2009-01-06T16:57:00+00:00 http://www.idealfinancesolutions.co.uk/finance/feature/legitimate-tax-avoidance-for-business/ http://www.idealfinancesolutions.co.uk/finance/feature/legitimate-tax-avoidance-for-business/#When:17:15:01Z No tax avoidance is legitimate in reality. However, there are ways of ensuring you pay a lot less tax than you could. There are also many forms of savings that can be made by organising your finances in the correct way. Getting professional advice from a qualified accountant is an absolute must when it comes to making your money go further. It may cost you money to get advice from them but the money you will save in taxes and other costs will far outweigh the outlay. Many people in business don’t see what is potentially available to them in terms of savings. For instance, you may be able to put certain costs through your business and save money in tax rebates. Your mobile phone bill and vehicle costs are obvious ones. If you ever work from home in a business capacity then there are less obvious costs that can be put through the business here. If you use an internet connection, a landline phone and a computer these can all be set against the tax you pay. An accountant will be able to advise you on where you can make savings based on your specific scenario whilst adhering to current rules and regulations. Obviously you could probably find out everything they will tell you yourself, but they know this information very well and can advise you quickly and efficiently. No business (or owner of a business) can get away from paying taxes – in many cases at quite a high level – but it is well worth being aware of the ways around paying more than you should. Professional advice will almost certainly improve your financial situation and open your eyes to shrewd thinking for the future. 2009-01-05T17:15:01+00:00 http://www.idealfinancesolutions.co.uk/finance/feature/how-to-avoid-business-collapse/ http://www.idealfinancesolutions.co.uk/finance/feature/how-to-avoid-business-collapse/#When:21:19:01Z Most small businesses fail because they run out of cash – not because they may not be profitable. Insufficient cash-flow is the main threat to fledgling businesses. Of course, there are many contributory factors in creating this problem and, over the long term, any business has to be profitable to survive. But the fact remains that most go to the wall due to a shortage of cash. The best way around this problem is to ensure that your business is properly capitalised and to plan ahead for any cash-flow problems you fear for the future. Maintaining cash-flow is perhaps more difficult at the moment than at any time in the past for many businesses, but there are many steps you can take as explained here. It is vital to ascertain how much money your business will need – both for start-up and to be able to stay in business until you achieve profitability. Remember, most companies take a year or two to get going properly, so you’ll need sufficient funding to pay all costs for that time. When planning ahead, manage your own expectations. Many businessmen are unduly optimistic about future revenues. A good and realistic business plan. An understanding of company accounts is also imperative. If you don’t have a good grasp of cash-flow, profit and loss and balance sheet issues – do something about it quickly. And if you’re relatively new to business, face up to the fact that you lack experience in certain areas and take action before it’s too late. A good accountant is essential to help steer your company through troubled waters. You may also need expert advice in areas such as finance, purchasing, sales, production, and staffing issues. Overall, though, remember that cash is king. So don’t underestimate how much cash you require. Review your cash-flow regularly. 2009-01-04T21:19:01+00:00 http://www.idealfinancesolutions.co.uk/finance/feature/when-is-the-right-time-to-exit-a-business/ http://www.idealfinancesolutions.co.uk/finance/feature/when-is-the-right-time-to-exit-a-business/#When:16:48:00Z Investors often decide to exit a business investment because their decision has proved valid, they’ve made a good return – and they decide it’s the right time to sell. Alternatively, they may feel that the business landscape has changed so that the original investment case is no longer sound. Many investors have a pre-planned exit strategy of some form – particularly for more speculative investments. The same principles apply to one’s own business. You may decide that your hard work has paid off and it’s time to enjoy the fruits of your labours, or to move on to something else. Alternatively, perhaps the company is no longer profitable due to shifts in the market of some kind and you can see no way of putting things back on a sound footing. Sadly, in today’s economic environment, the latter scenario is the harsh reality for many companies. Then again, you may have purely personal reasons for calling it a day. The exact timing can be a combination of personal and professional factors; exiting a business can simply be the most sensible decision to take for a whole host of reasons. If that’s the decision you have taken, it’s essential to seek expert advice as there are many things to consider – even for the smallest business (though generally, the larger your company is, the more complex things are). Remember - it’s just as important to plan a business exit strategy as it is to start up a company in the first place. Ultimately, the main aim is to maximise the value of your company before converting it to cash (or simply winding it up if necessary) and to minimise the amount of time consumed. A good accountant combined with expert financial advice will help you immeasurably with the process.  2009-01-03T16:48:00+00:00 http://www.idealfinancesolutions.co.uk/finance/feature/the-pros-cons-of-invoice-finance/ http://www.idealfinancesolutions.co.uk/finance/feature/the-pros-cons-of-invoice-finance/#When:15:32:00Z Invoice finance can provide a quick-fix finance solution – but use it carefully. With invoice finance – a company borrows cash against the invoices it has raised in order to provide working capital as soon as an order has been completed. This can free up cash-flow and allows a company to progress other work immediately or to pay urgent bills to keep things moving. Invoice finance is particularly good for large contracts where income is often “lumpy”. If a company has delivered on one extremely large contract, for example, but doesn’t expect to get paid in full for a while, it may make sense to realise some or all of the finance early through invoice finance to use the capital raised for day-to-day requirements.  Some companies choose “factoring” in organising their invoice finance requirements. This is where an invoice finance company - the “factor” - fully manages the company’s sales ledger and provides it with credit control and collection services for all outstanding debts. This can be a good way of protecting a business from late payments and bad debts. Invoice financing can raise anything up to 100% of the invoice value through a loan - though 80-90% is more usual. Funding is typically provided for around 90 to 120 days dependant upon the credit terms already agreed between the company and the debtors. Funds are usually released to the company by the factor within 24 hours of issuing the invoice.  But, like any form of loan, invoice financing should be used sparingly and sensibly. Interest payments cut into profits and a company relying continually on short term finance can go under when the credit runs out. That said, if used sensibly, invoice financing isn’t necessarily a very costly process. Invoice discounting facilities are often cheaper than overdrafts and save time in managing the sales ledger, as well as improving cash-flow. The trick is in organising the right type of invoice finance for your company’s individual needs through seeking expert and objective advice. 2009-01-02T15:32:00+00:00 http://www.idealfinancesolutions.co.uk/finance/feature/the-pros-cons-of-asset-finance/ http://www.idealfinancesolutions.co.uk/finance/feature/the-pros-cons-of-asset-finance/#When:22:07:00Z Asset finance can be an excellent business tool. But when is it right for you? Asset finance allows a company the full use of an asset without tying up valuable business capital. It can be used by a company that needs new equipment, or to release value in assets already owned. Asset finance can be an excellent tool for rapidly growing companies in purchasing new equipment – and/or those which need cash-flow quickly through unlocking the value in existing assets. And in today’s tough economic climate where cash and investors are harder to come by than ever – a cash injection through the realisation of value in capital assets can be invaluable. The details of lease agreements to provide asset finance vary. With a direct lease, a company agrees the purchase of an asset then arranges for the finance company to buy it and lease it back, whereas with sale & leaseback, the asset already owned by a business is sold to a finance company which then rents it back. There are downsides of course. Ownership of the asset/s being financed is with the company providing the finance - which in turn grants right of use for a specified period. This means that you pay “rent” (regular lease payments) on the assets your company which impacts on profits. All forms of asset finance or leasing are rental agreements with the finance company. So it’s essential to seek expert advice when you’re considering asset finance – whether to ease cash-flow or to buy new equipment. An expert will be able to analyse your individual company needs and advise on the best possible course of action. Factors such as past and future profitability, anticipated business growth rates, cash-flow and balance sheet strength will all have a significant impact on the suitability and specific format of asset finance. 2009-01-01T22:07:00+00:00 http://www.idealfinancesolutions.co.uk/finance/feature/business-plan-template/ http://www.idealfinancesolutions.co.uk/finance/feature/business-plan-template/#When:12:58:00Z A business plan is crucial to acquiring finance as well as being a working document on which to base your business decisions. Here are the essential elements to any business plan no matter what sort of business you are operating. Cash-flow forecasting This will not only give you an idea of what sort of targets to set yourself but it will also provide a bank with figures on which to base what sort of loan they may be prepared to offer you. Without some sort of financial forecasting it is highly unlikely that a bank would be willing to risk any form of credit. Mission Statement Although a mission statement isn’t essential to either acquiring finance or operating your business necessarily it is an important thing to have clear. Having a solid mission to follow as you move through the different stages of your businesses’ development will help you greatly to stay on-track at all times. Vision Statement Similarly to a mission statement this is not one that a bank will necessarily pay much attention to. However, it is again very important. If you intend your business to last the distance and continue to grow over a long period of time then having a vision for what you want to become will prove imperative. Financial Projections Like cash-flow forecasting, financial projections are very important. It is not wise to hope for the best or take it as it comes. You want to have solid projections and try your utmost to ensure that you stick to them. A bank will look at financial projections more than anything else as it on these projections that it will base the proposed repayment of any loans. It is a good idea to provide projections for year one, two, three and possibly four and five if you are able to. Open Source Business Plan Software A lot of open source business plan software is available online. It might be an idea to find a few example business plans and amalgamate the most prevalent parts of each for your business. 2008-12-31T12:58:00+00:00 http://www.idealfinancesolutions.co.uk/finance/feature/company-restructuring-advice/ http://www.idealfinancesolutions.co.uk/finance/feature/company-restructuring-advice/#When:18:34:01Z Financially restructuring a company can be a painful, complex but very necessary process. How do you best approach the task? Debt restructuring allows a company to renegotiate its debts in order to improve or restore liquidity so that it can continue and maybe improve its operations. The need to look again at a company’s funding requirements may be brought about by a wide range of circumstances such as the maturation of existing debt facilities, or the desire to make acquisitions. Alternatively, you may need to optimise cash-flow by raising finance (whether on or off balance sheet) secured against property or other assets. Or you may simply be looking at better deals in today’s increasingly complex debt market. Whatever the reason/s may be, when a company needs to raise new debt capital or wishes to refinance its existing debt facilities, the single most important thing to bear in mind is to seek expert independent advice. As a business person, you need to fully understand the various options available and to weigh up which best fits your company’s needs. There are many different ways of organising new finance and restructuring existing arrangements, but only objective and independent financial advice – presented in a way that makes sense to you – will enable you to make an informed decision that in turn assists your company in achieving its objectives. 2008-12-30T18:34:01+00:00 http://www.idealfinancesolutions.co.uk/finance/feature/accountants-the-good-the-bad-and-the-ugly/ http://www.idealfinancesolutions.co.uk/finance/feature/accountants-the-good-the-bad-and-the-ugly/#When:14:17:00Z Any accountant that offers to look after your financial affairs will claim to have the appropriate credentials to look after your needs properly. However, not all accountants work in the same way and it is well worth knowing what are the tell-tale signs of a bad one. Many a true word is spoken in jest as they say, but finding the right accountant can be one of the most important business decisions you ever take. An accountant that truly has the interests of your business at heart – as opposed to his/her own accountancy practice or career – is the person you’re looking for. This person will prosper with you, not despite you. This may sound obvious, but how many times have you spoken to an accountant and felt like they aren’t truly on your side and are presenting you with problems you really didn’t know you had? It’s true that a good accountant will challenge your business decisions and make sure you stay within the law, but the truly skilled accountant will always have the interests of your business at heart. Having an accountant you can trust to discuss your business needs in a way that makes sense to you, is priceless. An accountant should ease your workload and should be able save you significant amounts of money by making the right decisions concerning tax and advising on your finance needs. S/he can help with many areas of your business, including starting a business, creating business plans, tax planning, raising finance, audit and payroll. Always seek advice from others with experience. Personal recommendation achieved via excellent service over a number of years is the best possible way to find the right accountant. 2008-12-29T14:17:00+00:00 http://www.idealfinancesolutions.co.uk/finance/feature/the-10-biggest-mistakes-made-by-small-businesses/ http://www.idealfinancesolutions.co.uk/finance/feature/the-10-biggest-mistakes-made-by-small-businesses/#When:22:28:00Z When starting or operating a small business it important not to fall into some of the traps that many fall into in the early stages of their operation. If you ever feel that you need assistance in a particular area of your business it is always worth seeking advice from a professional. 1. Not doing a sufficient amount of market research in the early stages Many companies fall down with this element. Market research is essential when you’re starting a new business or trying to expand your current one. It is easy to fall into the trap of asking family and friends whether your business idea is a good one, but invariably you will only get the answer you want to hear. Proper research is required in order to get a full understanding of whether you business is a viable option in the current environment. 2. Not keeping accurate records It is imperative to keep full records on all of your business activity. If you are not thorough with this you will find that you have some serious problems to rectify later on down-the-line; especially if your record keeping anomalies are related to taxation and accounting. 3. Over spending in the early stages A common mistake from young businesses is to spend too much in the early stages without thinking about how this money will be covered by generating business. It is always easy to spend but it is very important to work out how you are going to cover any investments. 4. Having too many employees When new businesses start out they often think that they need a higher number of employees than necessary in the first stage. The fact is, if you are not generating enough business to warrant these employees then there is no point getting them in until it is the right time. Keep all unnecessary expenses down to a minimum. 5. Not interviewing employees properly When you’re taking the big step of getting new staff into your business it is essential to make sure that you interview them fully and carry out all of the appropriate checks before they start. Once you have agreed to employ someone it is very difficult to renege on the agreement so you want to make sure that you won’t regret your decision. 6. Not creating a proper business plan Similarly to not doing sufficient market research, many small business operators forget, or ignore the importance of a full working business plan. The business plan is a working document that you should look at regularly to help you run your business properly. 7. Not keeping your business and premises secure enough Proper security measures are an absolute must. You must ensure that you protect everything within your business as much as you can. Even though proper security measures can cost a lot of money, they may well save you a lot of money in the future if they do indeed protect your business from the threat of theft or vandalism. 8. Not having reliable suppliers Your suppliers can be crucial to the operation of your business. If your suppliers were to let you down, would you be able to cope and continue trading? Possibly not. When this is the case it is imperative to ensure that your suppliers are not going to let you down at any time. 9. Not accepting all major payment methods This sounds like an obvious one but it is incredible how many small businesses do not accept all forms of payment. For instance, by not accepting credit cards you may well be restricting yourself from receiving potential business from those who prefer using credit cards. You should accept all major payment methods and maybe even consider accepting alternative payment methods as well like PayPal. All you have to do is have a PayPal account. Remember: even if there are any associated costs they may well be outweighed by the fact that you get the business in the first place. 10. Over-trading Every business wants to do as much business as possible. However, it is quite possible to over-trade, especially in the early stages of your development. In order to keep customers and gain a reputation for quality you must be able to deliver every time. If you are over-trading you may risk not being able to deliver properly to a new customer and therefore risk losing that customer and possibly others. 2008-12-28T22:28:00+00:00