A downtime - a good time to start a business?
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A downtime - a good time to start a business?

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Clive Lewis, Head of Enterprise at the Institute of Chartered Accountants in England and Wales, gave this presentation at the 26th Business Startup Show on Thursday 17 November at Earls Court, London.

Clive Lewis, Head of Enterprise at the Institute of Chartered Accountants in England and Wales, gave this presentation at the 26th Business Startup Show on Thursday 17 November at Earls Court, London.

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A downtime - a good time to start a business? A downtime - a good time to start a business? Presentation Transcript

  • A downturn - a good time to start a business? A presentation by Clive Lewis, Head of EnterpriseBUSINESS WITH CONFIDENCE icaew.com
  • A downturn – a good time to start a business? Why start a new business? • Have a skill, trade, profession or vocation and want to exploit opportunities • Have a new innovative product/ service/ idea • Have a hobby or interest which might generate an income • Need an incomeBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Start-up survival rates • 90% last one year • Two-thirds last three years • 20% still going after ten years Based on VAT statisticsBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Reasons for businesses ceasing include: • Move back to employment • Sell business • Merge with other business • Retirement • Business failure resulting in insolvency or bankruptcy • Becomes a part-time businessBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Soft Issues – Positives • Being your own boss • Building something from scratch • A place in the community • An entrepreneur role-model • Tax advantages • Can sometimes be highly financially rewarding BUT: No Merc without workBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? The Soft Issues – Negatives • It can be lonely being the boss • You have to be a Jack-of-all trades • Getting out there / getting known • Paperwork & regulation burden • Long hours • Fear of Failure • Difficulty in “selling” your business ideaBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Being in business is not for everyone • If you need a regular income • If you are risk averse • Personal circumstances/ financial situation may mean timing is wrong Consider the alternatives • A part-time business • Gaining experience in chosen sectorBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Two quotes from Barclays Bank „Running a business‟ survey ‘ It’s the most satisfying and liberating experience I can imagine and a fundamental part of my life that I could not surrender’ ‘The practicalities are sleepless nights, worrying about my staff and how I can pay them every month and where we can find new business’BUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Ten tips: 1 - Do research • Customer satisfaction - Who/ where / what / how much? • Test product / service/ idea /price/quality • Use feedback to refine product / service / ideaBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Ten Tips: 2 - Write business plan • Use research to write plan • Description of product or service, market • Details of key people, experience, roles, etc • Financials: Year 1 in detail; Year 2 quarterly • Use plan to identify finance requirements, if any • Update plan regularly & compare actual performance to date with the plan. • In light of comparison review forecastsBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Ten Tips: 3 - Secure finance Being underfinanced is often a factor in early poor performance • How much & when • Different types of finance • Cost • Obligations • Credit history • Friends & family financeBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Ten Tips: 4 - Build in Contingencie • Setting up always takes longer • Think about regulations e.g. Health & Safety, Planning regs, etc • Delays usually increase costs & add to finance requirementsBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Ten Tips : 5 - Hire the best people you can afford • If you intend to grow having people capable of taking on more responsibility is a decided advantage. • People will often work for below market rates if convinced of potential for growth in role/ business. • Being able to trust employees is vitalBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Ten Tips: 6 - Find a mentor • Combat the loneliness • Someone to bounce ideas off • Your chartered accountant often fills this role • Use customers and suppliers as sources of adviceBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Ten Tips : 7 - Information is Vital • Financial information is not just to satisfy the taxman – use it to inform yourself on trading performance • Set up your records from the start • Talk to your accountant • Use software if you are comfortable with it • A good book-keeper is a possible first optionBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Ten Tips: 7 - Information is Vital – Key Performance Indicators – daily, weekly, monthly, annual data • Turnover • Gross margins • Overheads • Finance costs • Net profit • Cashflow/ Bank balances • Working capital – stocks, debtors and creditorsBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Top Tips: 8 - Be alive to the possibilities • Don‟t exclude taking the business in a different direction with the product or service • Keep a watch for competitors in difficulties • Listen to customers, suppliers & staff • Maximize the potential of the Internet- your website should be professional looking and well designed • Develop a marketing plan & think about advertising- leaflets, leaflet inserts &drops, Ads in yellow pages, etc • Work at getting personal recommendations from customersBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Top Tip: 9 - Starting is a Learning experience • As an entrepreneur you will learn a great deal & obtain new skills. • Learn from your mistakes – ask why did that (potential sale) not achieve the outcome I wanted? • Mentors - someone who has faced the challenges of starting a business and succeeded – can help with the learning.BUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Ten Tips: 10 - Minimise the likelihood/ effects of failure ‘Manage the downside’ • Shorten the learning curve – have previous experience of sector/ employ someone who has • Appoint a chartered accountant before starting – many have a wealth of experience with start-ups • Manage overheads/ working capital: - minimise investment in stocks - finance any assets by HP/ leasing - encourage prompt payment - keep some balance at bank/ unused facilities for contingenciesBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Ten Tips:10 - Minimise the likelihood/ effects of failure • Be prepared to recognise it‟s not working out • Protect personal assets - if possible • Ask „If I didn‟t do this, what would I want to do/ be doing‟?BUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Chartered Accountants (ACA or FCA) – the trusted adviser • Record-keeping • Help decide business format • Who do I need to notify? • Taxation compliance / planning • Help preparing business plans • Help raising finance Help - a phone call awayBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A downturn – a good time to start a business? Come to the London Region Stand • Talk over some of your issues • Find a chartered accountant • Obtain a copy of “Run a successful business” publication We‟re at Stand 284BUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • ICAEW Business Advice Service (BAS)BUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • BUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • Aim of the BAS BAS is intended to provide businesses with To offer an initial consultation for SMEs and start- experience ICAEW Chartered Accountant free of ups with an of talking to a chartered accountant about business issues, so that they gain charge insights into the financial, management and taxation issues involved in running a business.BUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • BUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • Searching for BAS firmsBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • Advantages for SMEs and start-ups • Provides SMEs/start-ups with professional advice • Easy to find on website and book consultation • No long term „lock-in‟ • Initial meeting is free of chargeBUSINESS WITH CONFIDENCE icaew.comCopyright © ICAEW 2011. All rights reserved.
  • A world leader of the accountancy and finance professionBUSINESS WITH CONFIDENCE icaew.com