Business Advice Archives - Page 11 of 11

Why your business needs a second Internet connection – or risks losing money

Posted on October 2, 2017 Written by Administrator

Connection to the internet has quickly become an essential part of any business. Whether you’re a retail shop or café and only need the internet for card payments, or if your staff rely on the basic use of emails and web browsing, or if internet connectivity supports your telephone system. There are also the more advanced uses such as cloud-based applications and disaster recovery solutions that keep larger organsations ticking.

And yet, almost 80% of UK businesses experienced a broadband outage last year, costing the economy £7 billion.

The impact

As a business owner, it’s worth asking yourself, ‘how much money would my business lose if I lost all connectivity? And would I be part of the lucky 25%?’

According to a recent survey, only 25% of those who were hit by internet outages last year were able to mitigate their down-time by adopting tasks which did not require internet usage. However, not all businesses are so lucky; especially those with widely dispersed departments in a variety of locations, with staff who need to stay connected.

Of course, there are various ways to get by when the internet fails. There’s the Starbucks down the road (other coffee shops are available) or tethering off your mobile data if you are fortunate enough to have unlimited 4G, but these are short-term solutions that just won’t cut the mustard during major outages. This is where a second internet connection comes in. The overall idea being that if your main service provider cuts out for whatever reason, your secondary connection is ready and waiting to take over.

The cost

Should your primary broadband service become disrupted, the cost to your business can be considerable. Everyday operations will come to a halt at 38% of businesses, 13% immediately start losing money following an outage and 46% will suffer a financial hit after four hours. However, considering that the average waiting time for service to resume is six hours, it’s surprising that only 13% of businesses switch to a backup solution. (Source: http://www.ispreview.co.uk/index.php/2017/03/isp-claims-uk-lost-7bn-2016-due-business-broadband-outages.html)

Whilst larger companies statistically lose the most money and productive hours, the effects of connectivity failure apply to all sized business; big, small and micro. As a general rule of thumb, the average downtime hours per business multiplied by the cost per productive hour lost, will give you the estimated loss to your business.

The average annual loss per business is as follows:

Solo (1 person) – £41
Micro (2-9 people) – £527
Small 10-49 people) – £3 ,950
Medium (50 – 249) – £15,670
Large (250+ people) – £497,433

The checks

There are dozens of reasons why an outage might have occurred; broadband providers themselves are not invincible, therefore malicious attacks or damage to the infrastructure is possible.

Aside from these situations that you cannot control, there are some simple actions that can be taken within your business to prevent outages:

Check that you are using internet connectivity that is suitable for your business purposes (this tends to be a common pitfall for many businesses that opt for residential connections as they are cheaper).
Check that all your routers have been configured properly
As your company grows its vital that regular checks and audits are carried out to ensure all IT and telecommunication systems are able to deal with the volumes and are protected against outages and cyber-attacks. You can internally review the scalability and resiliency of your systems by checking your bandwidth is still suitable for the size of your business. If your business has grown beyond your bandwidth speed and size, then it’s time to upgrade – before it falls over
Check the market, on a regular basis, to see if there’s anything available that your business could benefit from. In a rapidly evolving industry there are always new features that can make working life easier and more protected.

Unfortunately, despite your (and your provider’s) best efforts, sometimes a connectivity issue will arise. This is where the back-up connection comes into its own. Rather than wasting time moving to a temporary office space or rinsing your mobile data dry, a better option would be to implement a backup internet connection. What may seem like another unnecessary expense could save you a lot of unnecessary stress and money in the long run.

The solutions

Depending on the size of your business, there are two main options;

A step up from using your mobile phone data is a 4G router or MiFi device;these will connect to the 4G network in the event of an internet outage, meaning you can continue carrying out small tasks that require internet connection such as taking PDQ payments and sending emails. The cost of a device like this is around the £130 mark.
For businesses where a large chunk of the workload is carried out using internet connection, a second ADSL line would be a more reliable option. However, before taking this step it’s important to choose a different supplier to the one you currently receive your main broadband connection from. A second line should bring in the broadband connection from a different source, therefore if your main service provider encounters a major issue, your secondary connection will kick in.

Both new prospects and existing customers are key drivers in sustaining and growing your business. If neither can get through to you will they call your competitors? By adding a second low-cost connection, which can start from as little as £12.95pcm, you can be confident that your business will carry on as normal in the event of an outage. The figures really do speak for themselves.

About The Author

Nolan Braterman is from Frontier Voice and Data providing businesses with working, flexible, bespoke and price competitive communications solutions for more than thirty years. FVD is an independent supplier and carries a comprehensive, business grade suite of products to suit any type or size of company. See: http://fvdata.co.uk/

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How to claim your holiday and golf lessons against your business income

Posted on September 27, 2017 Written by Administrator

Can you really claim your holiday and golf lesson against your business? Yes – in certain circumstances and if done correctly.

Holidays

Holidays are another expense that most people don’t expect to be able to claim against but, again, if done correctly, you can. This is an area where there’s a lot of confusion but let me give you three common scenarios:

Extending a business trip: You need to go on a business trip to, let’s say, Las Vegas, and since you’re going there you decide to spend an extra day or two to do some shopping or sightseeing. There’s a great myth that because you’ve mixed business with pleasure, you can’t claim any of the trip expenses because now the trip has “dual purpose” and according to tax laws, you can’t make a claim for such a trip. But that’s not applicable if the primary purpose of the trip is business, that’s the key thing. But the only amount that you can’t claim against is the extra cost of staying in Vegas a bit longer. If you spend £1000 on the business trip and then the extra cost is £200, you can then pay the company back £200 and still claim the £1000 against its income, because the primary purpose of the trip was for business. Make sure you keep proper records, notes and also board minutes to document the main reason for the trip.

Also, if you decide to bring your spouse but they’re not a business partner or employee, then all you have to do is separate the cost; your spouse’s flights will be disallowed but your flight will be allowed and so on. So, simply put, as long as the primary purpose of the trip is business, you can claim against any cost in relation to that. Other non-business related cost will be disallowed.

Mixing pleasure with business: Let’s say you’re on a business trip somewhere nice and decide to go to the beach, without incurring additional cost. That doesn’t mean you’ve ruined the chance of claiming the cost of the trip against your income, it’s just another myth. But because the original purpose of the trip was for business, you can still claim the whole amount through the company. All you have to do is keep receipts for everything that you’re meant to be doing on the business trip and claim that against your income, your little fun on the beach doesn’t matter. Why because there is no additional cost and it’s just an incidental benefit from the main business purpose.
Turning holiday into a business trip: This is the only time where you absolutely cannot claim expenses against your income. When you go on holiday and the purpose of the trip is personal but then you decide to do some business while over there, you’ve waived your right to claim any expenses. Because the purpose of the trip was personal, you can’t claim any of the cost incurred while doing business.

Golf lessons and school fees

School fees, care home fees, staff holidays, and even golfing lessons – can be claimed as a business expense in certain circumstances if you run your business through a limited company rather than sole trader or partnership.

If you provide your employees with vouchers that they can exchange for, say golf lessons or school fees, HMRC allows you to claim against that, as long as you report this cost as a benefit to your staff. So as director, you can have your company pay for your golf lessons, the company reports this as a benefit and pays Class 1 National Insurance on the cost and you, as an employee, pay tax on it. Then, the company can claim the cost of this benefit against its income. Is it worth it? Yes, because the crucial point is that the company would have to pay higher tax on the golf lessons cost if it went through the payroll, so this way you can keep the salary cost down.

You can also claim drink and food in certain circumstances

Contractual obligation: Where it’s part of your business to entertain, say if you’re providing a training course to businesses and you entertain them as part of the course – maybe providing tea, coffee, lunch and so on – even if it’s food, you’re still allowed to claim that because you’re under a contractual obligation to give them food.

Staff entertainment: You are allowed to claim £150 a year per head for entertainment. Even if it’s just yourself, as director of a limited company, you can still claim this expense against your income. Because you (the director) are classed as an employee.

Quid pro quo: Let’s say you’re a freelance journalist and you want to speak to say Paul, a man who has world of experience on a topic you’re writing about. You offer to take Paul out to lunch in exchange for his insight into the topic which you’re researching. Because Paul is coming to the table with something of value but not benefitting from it apart from getting free lunch, you’re actually allowed to claim the expense, even though it appears as entertainment.

There is a helpful guide on HMRC’s site under their expenses and benefits section on this so if you’re not using a tax adviser or an accountant, you might find it useful.

Finally, make sure you get the paperwork and evidence right. Otherwise, you might be paying more tax than you have to, allowing your business to bleed money that it perhaps can’t afford.

About the Author

Jonathan Amponsah CTA FCCA is an award winning chartered tax adviser and accountant who has advised many clients over the last decade on tax deductible expenses. Jonathan is the founder and CEO of The Tax Guys. He is also the co-founder of Easy Tax Returns (a tax return app to help tax payers avoid stress, penalties and find their peace).

For more information see:

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67% of businesses do not use a form of customer relationship management system (CRM)

Posted on September 5, 2017 Written by Administrator

A recent survey by Applied Business, providers of enterprise resource planning (ERP) software, discovered that 73% of SMEs who aren’t using any form of workflow management software are “constantly” or “frequently” facing errors in manual processes.

Half of the respondents also admitted to never carrying out daily backups of IT systems, indicating that a considerable number of files, data and customer information could be lost.

Having No CRM Throws Away Opportunities

67% of those surveyed admitted to not using any form of CRM. A previous survey conducted by Applied Business also found that 28% of businesses believed manual operational errors were frequently affecting their CRM.

A strong CRM helps a business to organise and segment their customers based on their interactions with the business and maintain stronger relationships with them, providing more opportunities to upsell. Furthermore, a streamlined CRM is crucial to delivering a competitive edge by retaining existing clients through outstanding service.

Resistance to Change Delaying IT Updates

Change is a big deal to an organisation that is still using traditional methods or antiquated IT systems. According to the survey, 81% of respondents who aren’t using a CRM admitted “not knowing where to start” is the main change management challenge they face: 41% of all respondents said that not knowing where to start was the biggest hurdle.

Respondents also acknowledged how employee resistance is a major barrier, delaying system upgrades and achieving organisational change.

Having No ERP Results in Poor Workflow

73% of businesses who constantly or frequently face errors in manual processes are not using resource planning or workflow management software. For some businesses, poor project management could put their reputation on the line and seriously affect revenue.

Disaster Recovery Plans

When asked how often “do they back up their business systems and files”, 50% of respondents confessed to not conducting daily backups of IT systems. This represents a much higher potential risk of suffering losses due to having a lack of suitable systems in place and poor project management.

A thorough backup and recovery plan could make or break a company in the event of a disaster, which was the case for Zurich Insurance when they were fined £2.3 million after losing the personal details for over 48,000 customers during a routine data transfer to a data storage centre in South Africa. Considering the enormity of the data transferred, backing up the data beforehand could have prevented this catastrophe and the resulting damage to their reputation (source BBC).

How Often Should You Upgrade or Change Your Software?

Only 55% of businesses have updated their ERP, CRM, or project management software in the last two years, whilst 26% say they never upgrade theirs.

Running on outdated software can seriously affect productivity, but constantly changing software would cause mayhem in any operational environment. So, what’s the answer?

Employee resistance was found to be greatest for businesses that change or update their systems every three years, compared to shorter or longer time frames. On average, planning for updates, upgrades, or changes every two years reduced employee resistance.

What To Consider When Starting A Small Business – Where Will Your Premises Be?

Posted on July 6, 2017 Written by Administrator

If you are considering starting your own business, the location of your office / shop will be one of the most important considerations. Here we share some tips on what to consider:

Home or away?

First of all, what sort of business will you be running? If it something where people won’t generally need to visit you (for example, you provide an internet marketing business or a virtual assistant service), you may wish to weigh up the pros and cons of working from home.

If you have a spare room at home and know you’ll be disciplined in treating that room as your “office” and going there every day, this may be an option for you.

Also note that if you do work from home, there may be tax implications (good and bad), so do speak to an accountant for further advice.

If your business is to be one where people visit – whether it is an insurance brokers or hairdressers or fast food restaurant – then choose your location very carefully.

While this will be initially driven by any budget you have allocated, location is key. So, a hairdressers on a high street or near a railway station where getting to it is easy may do better than one where it is a drive away, from other shops. Also, take in to account the “treat” factor – if your premises is somewhere where there is lots of footfall, you are likely to get more people just walk in off the street to “treat” themselves, whether it is to a new haircut or something to eat.

Grants

Once you have narrowed down the location, talk to other shop owners in the vicinity to see if any properties are due to come up for rent /sale or whether there are any special government assisted grants available. Ask if there are any rumours about the local area (for example, if you are thinking about opening a coffee shop, make sure there are no plans afoot for a Costa Coffee or Starbucks to open up nearby). The less competition you will have, the better.

6 Top Tips On Setting Up A Small Business

Posted on July 3, 2017 Written by Administrator

A small business normally starts up for one of two reasons – by accident (a sole trader suddenly expands, takes on staff and becomes a small business) or is deliberate (someone sits down with a business plan and creates a business). How or why you intend to start a new business doesn’t matter – it’s about making sure you get all the “background” stuff sorted as soon as you start, so you don’t have any issues further down the line.

Here are some top tips …

Open a bank account in your business name even before the money has started coming in. This will make it easier for accounting purposes;
Take advantage of any free courses in start-ups – some of the banks offer online courses. See if your local governments offer any schemes. Even if you only pick up one bit of advice, it will be worth it;
If you are setting up a home business, do have a separate telephone line for work calls. If you don’t, when the phone rings, you never know whether it is a business call or a parent or friend “ringing for a chat as I know you are at home”;
Make sure you meet all legal requirements – for example, if you are employing people, then you’ll need employers’ liability insurance;
Find a trusted accountant – ideally someone recommended to you. It is all very well trying to save costs and getting a friend or friend to do it “who knows about book keeping” – a qualified accountant will help you make the most of your business income, such as telling you about tax breaks or grants;
Make sure you have adequate business insurance for your particular trade. In some cases, professional indemnity insurance may also be required if you are giving advice or certain services.

These tips are just the tip of the iceberg of what you need to think about when starting up a new business. They are very important, however, and getting them right first time will enable you to concentrate on building your business – rather than dealing with irate tax officials / customers etc!