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Small companies back new prime minister Theresa May

The Chartered Management Institute has backed the new prime minister’s pledge to make business fairer and work for the many, not the few.

Such action from the prime minister will place a greater onus on employers to create more inclusive workplaces, tackle stubborn problems like the gender pay gap and confront excessive executive high pay, says the organisation’s chief executive Ann Francke.

‘We’ll work with government, leaders and managers to make social purpose in business a priority that delivers benefits for all,’ Francke says.

The government must act decisively to secure the UK’s long-term economic stability after the decision to leave the EU, with immediate action needed to improve small business confidence, according to Mike Cherry, national chairman of the Federation of Small Businesses (FSB).

‘The new prime minister will decide the UK’s approach to EU negotiations, and she 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.’

The FSB also calls on Theresa May, as the new prime minister, to guarantee non-UK EU nationals, many of whom run their own small businesses or are employed by small businesses, to be granted the right to remain in the UK both during the negotiations and thereafter, and to use the negotiations to ensure that UK small firms and the self-employed who work in the EU can continue to do so.

Call to get back to business on infrastructure

‘With business confidence at the largest annual fall, 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,’ Cherry adds.

Sinead Hasson, of recruitment company Hasson Associates, would like Theresa May to be sympathetic to the issues that small businesses will face because of Brexit and take action now to negotiate a deal out of Europe that safeguards business.

‘As a small business owner uncertainty is never good for the economy so with her experience and credibility on a global stage I want her to steer the smoothest Brexit course possible… the outcome will have a very real impact on my business and on the industry I recruit for, an industry reliant on the knowledge and experience of people not just here in the UK, but across the whole of Europe,’ Hasson says.

Chloe Webber, of Company Check, highlights the significance of a female prime minister after half a century of male dominance. ‘Within six months we could be in the unprecedented position of having women leading the UK’s two largest parties. And in the White House too; good news for equality, bad news for the glass ceiling,’ she adds.

Alison Scrivener of Diligence Services adds, ‘I would like to think that Theresa May will be a good prime minister for the country during this time of political change; we are seeing parties ripped apart and the country moving away from the EU so she certainly has a tough job ahead, but she can make a positive name for herself if she uses the collaboration and cohesion qualities, which women are often more successful at than their male counterparts.’

Read more from smallbusiness.co.uk here

Important information regarding the introduction of “KC” as a prefix for National Insurance numbers

HMRC have recently introduced “KC” as a new prefix for National Insurance numbers. This change was not included in the specification HMRC provided to payroll software developers this year. It’s also not catered for by the Government Gateway itself. As a result, Opera 3, Opera II and Capital Gold payroll systems do not accept NI numbers with the KC prefix, and FPS submissions containing these NI numbers are currently being rejected.

Until this issue is resolved, HMRC guidance to employers is not to enter NI numbers with the KC prefix into their payroll systems. We therefore advise users of Opera 3, Opera II and Capital Gold Payroll to leave the National Insurance Number field blank when adding a new employee with a KC NI number, and ensure that the employee’s name and address details are completed in full as HMRC will be using these as employee identifiers.

Five ways business skills can transfer into everyday life

In today’s day and age, more and more people are realising that the acquisition of valuable business skills can seriously help them in the world of work. Certainly, building a skill set of important business skills such as time management and conflict resolution can make your work day more productive and aid you in gaining career advancement opportunities. However, it’s also important for those skilled in business to understand that the skills which you’ve obtained can be valuable to your personal life, too.

Leisure time

The skills which you’ve acquired from working in or running your own business can actually help you enjoy your leisure time to its full potential. For example, you can use business skills such as knowing how to plan effectively, knowing how to choose the best people for your team and understanding when to take calculated risks can be pretty useful to help you win a poker game. Along with that, other business skills such as knowing how to look for the best value can help you find things such as good value vacations, cars, property and more that you can expect to spend money on.

Time management skills

When working in business, having good time management skills is absolutely imperative. In order to succeed, it’s crucial to be able to manage your own time effectively and understand how much time to allocate to different things and situations. Because of this, the time management skills which you’ll pick up when working in business can help you effectively manage your personal life and get the most from the different things that you do.

Communication skills

As a business owner, manager, or even an employee it is vital to have good communication skills. Working in business means that you need to communicate with a range of different people, from management to peers and customers. The skills that you learn while communicating with others in a business setting can directly transfer over to your personal life, giving you better skills and more effective results when communicating with people such as family and friends and dealing with conflict resolution on a personal level.

Money management

One of the most important transferable skills which you can learn from working in business is money and finance management. When working in business, it’s crucial to have good management skills when it comes to finance, and working out costs, expenses and cash flow is something that, after a while, becomes second nature to most people in business. Because of this, you will become more efficient at managing your personal finances, and be better at working out your personal cash flow and improving it.

Studying

In order to succeed in business, it’s important to always be open to learning new things. It’s definitely not uncommon for business people to constantly be looking for new opportunities to take courses and gain qualifications to help them in their field. As a result, your study skills will be hugely improved, something which can definitely be of use to your personal life.
Which business skills have you found useful in your personal life? We’d love to hear from you in the comments.

Read more from smallbusiness.co.uk

Devon Chamber of Commerce comments on EU Referendum ‘Leave’ result

George Cowcher at Devon Chamber of Commerce commented on the result of the EU Referendum vote: “Now that the vote has been confirmed, and the people of the UK have voted to leave the EU it is important that the Government provides a clear plan of action for the leaving process. Businesses are in need of stability and reassurance, without arguments or in fighting within political parties of how the leave process should be handled.

Stability and clarity will be of utmost importance in order to prevent any further damage to the UK economy caused by the uncertainty leading up to the EU Referendum vote. Of particular importance should be a focus on ensuring stability for the money markets, particularly relating to the strength of the British Pound, and in interest rates. The Government needs to take these factors into consideration to ensure that the leaving process does not send the UK economy into a downward dip.

The Chamber will be hosting a number of events across the county to discuss the EU impact and the consequences businesses face on leaving the EU, the first of which will be held on Wednesday 6th July, to further lobby for necessary actions to be taken to support the business community. It is of the best interests for the whole of the UK that business is supported throughout this process to ensure that the growth having been seen in previous quarters continues to pull the UK fully out of the recession it has faced for a number of years.

This is a very sensitive time for all businesses and the Chamber is keen to hear from anyone who has particular concerns surrounding the EU referendum result so that these issues can be raised by the Chamber with Government”

To share your concerns please contact Chamber Membership Manager, Verity French, on 01752 273892

Read more from Devon Chamber of Commerce here

Five things to consider measuring in your small business

Emily Coltman from Freeagent gives her top tips for successful business measurement.

When you’re running your own small business it can sometimes be a challenge just staying on top of your everyday work, let alone managing all the things you need to do behind the scenes.

But if you can dedicate some time to measuring a few important pieces of admin in your business, you may find that you’re likely to work more effectively and give your business the best opportunity to grow.

How you’re spending your time

If you bill clients by an hourly or daily rate, you’re probably already tracking your time to ensure you charge for all of the work that you do. But monitoring your time is still a very useful habit to get into even if you don’t bill this way.

By identifying how much time you actually spend on working for clients compared to managing your daily business admin, you’ll be able to see how profitable your business really is and which clients are potentially costing you money. If you track admin time, and other unbillable time, you’ll also be able to see exactly how much time you’re spending on your business that you can’t charge for. It may well be more than you think!

And if your business offers a range of different types of services, you’ll also be able to identify which areas are most profitable, which may enable you to spot new business opportunities or even pivot your business completely.

Your business’s financial position

Calculating your profit margin is very important when you run a small business, because you’ll see which of your customers or projects are most profitable and can then use that information to try and grow your business. But there are other areas of your finances that are equally useful to monitor.

Make sure you stay on top of your business accounts and look regularly at the overall financial position of your business; ie, your cash flow, profitability, how much tax you owe and the amount of money you actually have in the bank. We found that just 38 per cent of micro-business owners check their financial position every week, while one in ten only check that information once a year. That means they don’t really know how their business is actually performing and run the risk of not being able to identify or deal with potential cash flow problems until it’s too late.

Customer satisfaction

Expanding your customer base is an important way to grow your business, but it’s equally important to make sure your existing customers are happy. Research from customer service software company Zendesk shows that 95 per cent of people share bad customer experiences with others, while 39 per cent avoid vendors who they have a bad encounter with.

Therefore it’s important to understand how your customers feel about your business and whether they would recommend you to others. Carrying out a survey among your customer base and calculating your Net Promoter Score (NPS) is a great way to do this, but you may also want to look at other channels such as social media platforms to poll your followers and ask them for feedback about your business.

Staff morale

If you employ people in your business, you’ll want them to be as productive as possible, but you may also want to consider measuring how happy they are at work. Research suggests that high staff morale can increase productivity, so it’s a good idea to regularly survey your employees and measure their responses.

Are they happy in their jobs and with the business that they work for, or do they have any reservations? And are there areas that could be improved in order to make them feel happier? Armed with this knowledge, you’ll be able to address any potential problems as they arise and stop them from becoming bigger, morale-destroying ones in the future.

Social media impact

If you use Facebook or Twitter for your business, you probably try to measure the ultimate effect that these channels have on bringing new customers to you and, ultimately, improving your bottom line. But there are many other important metrics to consider when it comes to social media.

Look at how your individual posts are actually performing, and in particular how followers engage with those posts. Are there certain times of day when people click on the content you share? Are there specific types of post that generate more shares or likes than others? Do your followers tend to shun any advertising or self-promotional posts that you put out? A good social management tool like Hootsuite or Sprout Social can reveal that information, which will enable you to tailor your future social media activity and make sure it is performing as effectively as possible.

 

Read more from smallbusiness.co.uk

Businesses held back by tax and regulatory changes

Almost two thirds of businesses claim that the lack of skilled workers available and constant alterations to tax and regulatory requirements are adding significant pressures to their business.

As 74 per cent of businesses are planning for growth over the next 12 months it is vital that business owners keep abreast of prospective tax and regulation, says Rebecca Combes, head of business tax at the Southampton office of Smith & Williamson, which commissioned the Enterprise Index, a survey of business owners.

‘A complex and uncertain tax system adds a challenge to ‘scale-up’ businesses. I don’t think tax is at the forefront of people’s mind when growing their business, however, it can present frustrating obstacles and hurdles and may cause some loss of momentum on the growth curve of a business,’ she adds.

The closure of the UK government’s Business Growth Service (BGS) which supported small businesses seeking to grow has made for difficulties, Smith & Williamson says.

The planned regional growth hubs to replace the BGS have not been widely welcomed by respondents, with 68 per cent believing the growth hubs would not sufficiently replace the support given by BGS.

Additionally, business owners are becoming increasingly worried about the lack of skilled staff available; less than half of respondents believe there are sufficient people and skills to fill vacant positions.

In particular, some 66 per cent of respondents believe the lack of STEM (science, technology, engineering and maths) skills among students is hindering the scaling-up of British businesses.

‘Growth is also being prohibited by the uncertain economic future with staff not wanting to move for fear of being last in first out if there is another downturn, making it harder to access good staff,’ adds Combes.

The Enterprise Index, which measures the views and confidence of owner-managers and entrepreneurs in the UK, decreased four points to 111.4, its lowest point for 12 months.

Brexit worries and concerns over the state of the UK and global economy appear to be the primary cause as expectations for growth fell by 9 per cent.

Read more from www.smallbusiness.co.uk here

Company owners in the dark about business rate changes

From April 2017 businesses whose properties have a Rateable Value of up to £12,000 will not have to pay business rates at all, a rise from £6,000 previously.

Property with a Rateable Value between £12,000 and £15,000 will receive tapered relief. Chancellor George Osborne says the ‘typical corner shop in Barnstaple will pay no business rates at all’.

Despite this, a survey by CVS, shows more than a third (36 per cent) of business owners are unfamiliar or unaware with the changes put in place by the government.

What’s more, three in ten small business owners, with between one and 49 employees, say the changes in business rates aren’t enough to help local businesses and our high street.

The amount that could be saved is up to £5,900 for those with a rateable value of less than £12,000 per annum.

Mark Rigby, chief executive at CVS Business Rates says that, on the whole, the changes are very positive for local businesses.

‘For many small firms, it will mean smaller overheads, less administration and an overall cost saving of as much as £5,900 in some cases.

‘This is money that could be reinvested back into the business for better marketing, trialling a new product, or increasing staff hours, for example.’

The changes are scheduled to be introduced from April 1st 2017. This is also when the next business rates revaluation takes effect; the process by which each commercial property has its rental value assessed by the Valuation Office Agency. This rental value is then used to calculate the business rates you pay each year on your bill.

The Valuation Office will publish its draft new values for each property on 1 October 2016 for consultation with local billing authorities, Rigby says.

When the next revaluation comes into force, some businesses will move outside of the £12,000 threshold for rates relief, and some will fall within it. This largely depends on the specific nature of your property and where in the country it is located.

Rigby advises that the Valuation Office Agency is responsible for valuing businesses and it will often request information from a business owner via a ‘form of return’. However, because there are so many properties to evaluate (some 1.8 million), it’s easy for the Valuation Office to make mistakes in this process.

‘Every ratepayer has the right to challenge their business rates bill at any time between revaluations. There is only one opportunity to do this however. Your chances of achieving success through an appeal, and therefore saving money, are improved if you get advice from professional, accredited surveyors.’

Read more from www.smallbusiness.co.uk

An ageing workforce: Why small businesses should get prepared

Andrew Firth looks at what an ageing workforce means for small businesses, and what role company owners can play to maximise productivity.

Over-50s have increasingly become an innate characteristic of the UK workforce. As business owners observe an increase in the number of older workers remaining in employment for longer, employers need to prepare themselves and their workers for extended working lives. Here’s what an ageing workforce means for small businesses, and what role business owners can play to maximise productivity, whilst preparing all employees for the latter part of their working life.

Workers over 50 already comprise 27 per cent of the workforce in the UK, and by 2020 that number is expected to grow to one-third, according to the Department for Work & Pensions. Due to increased life expectancy and the removal of the mandatory retirement age (in 2011), employers are experiencing an ageing workforce like never before. Many older workers are reluctant to retire voluntarily, often because they have not saved as much as they had hoped to for a comfortable retirement (due to making ill-informed choices regarding savings). Additionally, the revelation that delaying retirement can have positive health benefits has encouraged older generations to stay put in their jobs, contrary to previous research suggesting early retirement leads to a longer life.

But what does this mean for small businesses? Older workers are more experienced, patient and bring expertise to the table, meaning they are perfect for mentoring younger employees. They can make a valuable contribution to the culture and morale of the staff, and are proven to have fewer sick days. Physically, there is little evidence that they are at higher risk of occupational accidents, however, if they do have an accident, their recovery may take longer than that of a younger colleague. This could well be a consideration for those businesses that require a high level of physical activity.

There are many ways that small business owners can embrace the growing proportion of older employees, and maximise the opportunities they bring. This will often require a shift in culture towards a more open dialogue from the outset about lifestyle and forward-planning for retirement.  Future plans should be discussed throughout working life, not just before retirement, as this allows employees to make informed choices about their savings (and can also facilitate an open conversation about the optimal retirement age). Helping to plan lifestyle changes, such as increasing levels of physical exercise, can also be advantageous. Investment in training to ensure skills are up to date should not be overlooked for the older generation of workers, nor should the importance of older staff members mentoring younger colleagues.

How can small businesses address retirement planning amongst the workforce? There is currently an acute lack of understanding and education around pensions; many employees are simply unable to make informed choices for their future as they do not have the information they need.  According to research commissioned on behalf of the Open University Business School (OUBS) two-thirds (64 per cent) of UK employees have never received personal finance education. The research also finds that, while 81 per cent of employees want personal finance help from their employers, only 7 per cent of those who have received financial education got this from their employer. How to invest their pension, when to retire, and how to start receiving benefits are all questions that employees are looking to address.

Making retirement planning accessible across the business, and listening to the concerns of the workforce is a great way to start. For all employees, young and old, the choices they need to make regarding their pension; how to invest, how much to contribute, and when to retire, can be intimidating. Employers can provide access to help them get a clear picture of the types of choices available and what they will mean for their future. There are many resources available from pension providers, along with guidance provided by Pension Wise, TPAS and Citizens Advice (for those approaching retirement).

Offering tailored expert financial advice should also be considered; it may be more cost-effective than business owners anticipate. Engaging an online advice service (or robo-adviser) can offer employees access to expert financial advice through online web apps or wizards for a fraction of the cost of face-to-face advice.

An ageing workforce certainly has its opportunities for businesses. Employers must overcome any perceived barriers and recognise the value older workers can bring. Preparation of the workforce for retirement is essential throughout working life; access to advice should be offered by businesses to all members of staff (whatever their lifestage). This will help to achieve optimum productivity levels in the workplace, and satisfaction among employees who feel confidence in their chosen retirement plan.

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Reducing the impact of the National Living Wage

Alan Price discusses the topic of the mandatory Living Wage for employees over 25, which has forced many businesses to look at how the extra cost can be absorbed.

Wage increases are normally configured by employers to stay within the realms of what is realistically viable taking into consideration economic trends, current and predicted outgoings, and the employee’s value to the organisation.

However, some wage increases are dictated by the government meaning that employers are not able to decide for themselves whether it is an achievable extra cost. This has happened most recently with the introduction of the National Living Wage (NLW); an hourly rate of £7.20 which must now be paid to workers who are aged 25 and over. This represents an hourly increase of 50p to workers who are paid in line with the minimum wage, who were, before implementation of the NLW, eligible to receive £6.70 per hour. Where workers work 37 hours a week and are paid weekly, the new rate amounts to a yearly pay rise of almost £1,000.

Some employers may find this legally imposed increase difficult to cope with. There are various ways that the extra cost could be absorbed; changing to a cheaper supplier, increasing pricing, tightening stock control. However, it may be that the employer decides that the cost of the overheads must be absorbed by the employees themselves. Because of the NLW, some employers are already looking to make changes to employees’ terms and conditions to keep the pay package the same overall despite the increase in physical wages. Overtime rates is one area where cuts are being made; attendance bonuses and profit share percentages may be others in the firing line.

Contractual terms are legally binding when agreed by employer and employee. It is generally unlawful to change any term of employment without agreement by both parties. Employers who want to make changes to overtime rates or any other area of the benefits package that an employee receives should seek to gain employees’ agreement before doing so, otherwise they risk a breach of contract claim. In serious cases, employees could claim that they had no alternative but to resign from their employment due to a pay cut which fundamentally undermined the employment relationship. In this case, the employee can consider themselves to have been dismissed and make a claim to employment tribunal.

It is not impossible to change key terms of employment if the employer feels that they have a pressing business need to do so. In this case the agreement of the employee is not necessarily required, although it should always be sought in the first instance. A period of consultation should take place, the details of which are prescribed in law in some circumstances, where the employer keeps the employees up to date with their plans, the reason for them, any timeline involved and gives the employees the opportunity to have their say. This consultation period is essential because continued resistance to the changes from the employee could result in their dismissal on their current terms; however, the employer must then offer re-engagement on the new terms that they wanted to implement, eg a new contract which does not include the benefits of the previous one.

It would be open for the employee to challenge the validity of the employer’s pressing business need in an employment tribunal. The employment tribunal would consider the reason for the change, and the manner in which the process was carried out by the employer in determining whether their dismissal, whether or not re-engagement occurred, was fair. Even employees who are re-engaged retain the right for a limited amount of time to claim unfair dismissal, provided they ‘work in protest’ under the new terms.

Alan Price is employment law director of Peninsula.

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The top five threats to UK businesses – and how to protect against them

The start of 2016 has already seen widespread unease in the business world, with share prices fluctuating wildly. By Nick Martindale

There are real economic concerns in the form of the slowdown in China and the weakening oil sector, while closer to home the possibility of Brexit is causing a distinct sense of unease. The following provides a round-up of some of the more significant threats to UK firms this year, and examines how to protect your organisation:

Global economy

The slowdown in China and subsequent market reaction shows just how interconnected the world has become, says Olivier Desbarres, an independent emerging markets and G10 economist. “The financial crash of 2008 centred on the banking sector and mortgage market,” he says.

“Banks, manufacturing and energy sectors, to name a few, are all sluggish.” At the same time, growth in the eurozone remains unsteady, he adds, while the euro itself is still weak in the wake of the migrant and Greek debt crises.

How to protect your business: Make plans on how to cope with a global financial crisis, and keep options open in terms of targeting new markets should the eurozone again enter a recession

Uncertainty

The EU referendum is already causing ambiguity and uncertainty, and this is set to have an impact on the willingness of businesses to invest or grow. “The default operating mode for many is coping with constant revolution, and never more so than today,” says Patrick Gallagher, chief executive of distribution company CitySprint.

“Our research tells us the biggest uncertainty for the UK’s SMEs this year is a possible exit from the EU. This is causing them huge concerns, especially around their long-term growth plans. Some 1.45 million SMEs in the UK say they are looking to grow internationally this year, up from just a million in 2014. Uncertainty limits their ability to achieve this.”

How to protect your business: Do your research into the possible implications of a Brexit and make sure you plan for all eventualities. Once it’s clear which way the vote has gone and the likely consequences, act fast

Currency volatility

All of the above means currency markets are extremely turbulent, with the pound hitting a new low against the dollar in February and speculation that it could fall by a further 20 per cent in the event of a Brexit. “This isn’t just a problem for City traders – it affects every British company that does business overseas too,” says David Lamb, head of dealing at FEXCO Corporate Payments. “Importers are being particularly hard hit, as a sudden depreciation in the pound can turn a profitable deal into a loss-making one in a matter of days.”

How to protect your business: Fix any amount that will be paid to a foreign supplier in advance using a forward contract. This will ensure you pay an agreed amount in sterling, and will protect you against any drop in the pound’s value

Talent

For many organisations, the challenge in 2016 will be to attract and retain the skilled employees they need, in the wake of competition from home and abroad. “LinkedIn data shows that markets such as the United Arab Emirates are the net winners when it comes to attracting professionals to their market, whereas the UK experienced a net loss in 2015,” says Chris Brown, director of LinkedIn Talent Solutions UK.

“This trend has been driven by a range of factors, from greater mobility in the workforce to social media giving employers greater visibility of the available talent in the marketplace, and the ability to easily contact them.”

How to protect your business: Build your own employer brand to attract people to work for you and safeguard your reputation – particularly on social media

Hacking

Cases of cyberattacks are on the increase, and this is increasingly becoming an issue for smaller businesses as well as multinational firms. According to a report by the Government’s Cyber Streetwise campaign and KPMG, only a third of small firms think they are fully prepared for an attack, despite the fact that 60pc have already experienced a security breach.

“As well as impacting the business and their customers, such an attack could hinder an SME’s future ability to win work,” points out George Quigley, a partner in KPMG’s cyber security practice. “Our research shows 86pc of procurement managers of large companies would consider removing a supplier from their roster if they were to suffer a data breach.”

How to protect your business: Take simple steps such as installing security software on all devices and updating operating systems, as well as using stronger passwords made up of three random words.

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