TaxAssist Accountants <ul><li>Based on Sundorne Avenue in Shrewsbury </li></ul><ul><li>Started October, 2003 </li></ul><ul...
Nigel Lomax FCMA TaxAssist Accountants <ul><li>Wide business experience </li></ul><ul><ul><li>Finance and general manageme...
My Objectives <ul><li>Choosing most appropriate structure </li></ul><ul><li>Getting finances right </li></ul><ul><li>Busin...
Most appropriate structure...  depends on <ul><li>Business volatility </li></ul><ul><li>Your approach to risk </li></ul><u...
Most appropriate structure <ul><li>Sole trader </li></ul><ul><ul><li>Simple, inexpensive but with risk </li></ul></ul><ul>...
Other important considerations <ul><li>Inform HM Revenue and Customs </li></ul><ul><li>Consider VAT position </li></ul><ul...
Getting finances right  <ul><li>Have a business plan (not just numbers) </li></ul><ul><ul><li>include a cashflow and profi...
How can a plan help? <ul><li>Gives a structure to develop ideas. </li></ul><ul><li>Helps identify risks and opportunities....
Tips for a solid business plan - 1 <ul><li>Be clear on what you will achieve and what you need. </li></ul><ul><li>Make sur...
Tips for a solid business plan - 2 <ul><li>Start with an assessment of your finances and your monthly minimum income. </li...
Tips for a solid business plan - 3 <ul><li>Look at it as if you were being asked to invest. </li></ul><ul><li>Explain how ...
Tips for presenting your business plan <ul><li>Be well prepared. </li></ul><ul><li>Explain your track-history. </li></ul><...
Getting finances right  <ul><li>Develop an appropriate and useful business record-keeping system </li></ul>
Business record keeping - benefits <ul><li>Improved control </li></ul><ul><ul><li>e.g. Credit control </li></ul></ul><ul><...
Business record keeping - principles <ul><li>Use bank accounts and credit cards solely for your business </li></ul><ul><li...
Business record keeping - options <ul><li>DIY </li></ul><ul><ul><li>Manual  </li></ul></ul><ul><ul><li>Excel </li></ul></u...
Management Accounts <ul><li>Management accounts report trading performance (P&L Account), capital employed (Balance Sheet)...
Trading account analysis  <ul><li>Supports decision-making (fixed asset investments, marketing projects, new products/mark...
Cashflow <ul><li>Cashflow is the change in your bank balance. Sole traders will add back drawings to measure the business ...
Working capital  <ul><li>It is influenced by the “speed” of the “production” cycle and the strength of the supply chain. <...
Speeding up customer payments (1) <ul><li>Only trade with businesses that can pay </li></ul><ul><li>Take every opportunity...
  Speeding up customer payments (2) <ul><li>Put your bank details on all invoices and statements </li></ul><ul><li>Reward ...
  Speeding up customer payments (3) <ul><li>Have a collection routine and stick to it </li></ul><ul><li>Be firm but polite...
Warning signs  <ul><li>The sudden big order </li></ul><ul><li>Broken promises/non-availabilty </li></ul><ul><li>Requests f...
VAT registration illustration
Payroll <ul><li>Must run where employees earn above NI LEL limit. </li></ul><ul><li>Strict definition of casual employees ...
Other common questions <ul><li>What can I claim </li></ul><ul><li>Using own car </li></ul><ul><li>Use of home </li></ul>
TaxAssist Accountants 01743 366669 <ul><li>1 Sundorne Avenue, Shrewsbury. SY1 4JW </li></ul><ul><li>[email_address] </li><...
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Finance workshop - The BIG Jelly 25th March 2011 - Nigel Lomax, Tax Assist

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  • Go back to original definition. Once a business is trading, it is possible to focus plan on single aspect eg sales and marketing
  • Avoid hype, spell out what makes you different (better, cheaper, value for money, premium, fashion, quicker) Words and figures match – UK manufacturer going for cost-leadership will have high capital and low labour costs. Is it a new market? Or a mature market? Mature markets offer great opportunities – Mars Bar. Boston Consulting Group grid. New markets are not for the faint-hearted and competition needs to be locked out. Brands are very powerful – Virgin (wasn’t it originally records). Talk about Clearcut. Explain the problem that you are going to solve. Benchmark ??? Compare what is important against competition – right first time/ price/
  • Don’t lose sight of the fact that you have to live. Get buy-in from spouse or partner. Beware of university. Don’t become exposed – refer to the planning wheel. Make sure that you consider income protection, private medical insurance, life cover. Make sure that you select your proper trading vehicle – sole/partnership/limited company. You need to show that you realise that profit doesn’t immediately appear in your bank. There is a lag – working capital. So first 12 months accounts might show 12 months sales as income but only 10 months have been paid for. Businesses have found it difficult to obtain funds so they now rely on stretched payments terms and it only takes one part of the chain to affect everyone. Risks – show what happens if sales 10% lower, prices 10% lower, costs 10% higher. Then plan to minimise risk. What if the sales pipeline is longer than planned. How are sales and purchases concentrated? Keep an eye on trading trends – Riskdisc. Watch out for competitor reaction. Legislation changes. Take advantage of new flexibility offered by commercial landlords. New economy – be allergic to commitments (Evans Easyspace). Try to be quick – identify and reduce work in progress. Spoken before about working capital. Hotspots – spikes in cashflow, contract renewals.
  • What would you do if someone showed you a piece of paper and asked you to lent him £50,000. Offer the lender a regular review. Explain the MIS that will be used. Look for break clauses. Understand your break—even point. Explain how you will nurture key relationships – customers and suppliers Funding: Loan, overdraft, factoring, asset-finance, grants, business angels, friends and family, personal borrowing. Enterprise Finance Guarantee, Growth Capital Fund.
  • Know what your lender wants, ask for feedback, be prepared to try again. They are investing in you
  • Fictional example. Needs £59,000 funding. Good sales growth and good third year profit
  • Finance workshop - The BIG Jelly 25th March 2011 - Nigel Lomax, Tax Assist

    1. 1. TaxAssist Accountants <ul><li>Based on Sundorne Avenue in Shrewsbury </li></ul><ul><li>Started October, 2003 </li></ul><ul><li>400 clients </li></ul><ul><li>Team of 7 </li></ul><ul><ul><li>Nigel (FCMA), Melanie, Liz (ACA), Craig, Julie, Natalie and David </li></ul></ul>
    2. 2. Nigel Lomax FCMA TaxAssist Accountants <ul><li>Wide business experience </li></ul><ul><ul><li>Finance and general management </li></ul></ul><ul><ul><li>Many industries </li></ul></ul><ul><li>Approachable, friendly and responsive </li></ul><ul><li>Fixed Fees </li></ul><ul><li>Interest-free Direct Debit </li></ul><ul><li>HMRC enquiry protection </li></ul>
    3. 3. My Objectives <ul><li>Choosing most appropriate structure </li></ul><ul><li>Getting finances right </li></ul><ul><li>Business planning </li></ul><ul><li>Record-keeping </li></ul><ul><li>Using your management accounts </li></ul>
    4. 4. Most appropriate structure... depends on <ul><li>Business volatility </li></ul><ul><li>Your approach to risk </li></ul><ul><li>Your intentions (selling or passing on) </li></ul><ul><li>Taxation </li></ul>
    5. 5. Most appropriate structure <ul><li>Sole trader </li></ul><ul><ul><li>Simple, inexpensive but with risk </li></ul></ul><ul><li>Partnership </li></ul><ul><ul><li>Similar to sole trader (consider partnership agreement) </li></ul></ul><ul><li>Limited Company </li></ul><ul><ul><li>More bureaucracy but usually most tax-efficient and less personal risk </li></ul></ul>
    6. 6. Other important considerations <ul><li>Inform HM Revenue and Customs </li></ul><ul><li>Consider VAT position </li></ul><ul><li>Consider PAYE/CIS position </li></ul><ul><li>Set up a record-keeping system </li></ul><ul><li>Lots of penalties lurking </li></ul>
    7. 7. Getting finances right <ul><li>Have a business plan (not just numbers) </li></ul><ul><ul><li>include a cashflow and profit forecast </li></ul></ul><ul><ul><li>Use it to critically examine the risk in your business </li></ul></ul>
    8. 8. How can a plan help? <ul><li>Gives a structure to develop ideas. </li></ul><ul><li>Helps identify risks and opportunities. </li></ul><ul><li>Leads to growth through extra finance. </li></ul>
    9. 9. Tips for a solid business plan - 1 <ul><li>Be clear on what you will achieve and what you need. </li></ul><ul><li>Make sure the words are reflected in the numbers. </li></ul>
    10. 10. Tips for a solid business plan - 2 <ul><li>Start with an assessment of your finances and your monthly minimum income. </li></ul><ul><li>Present profit and cash-flow statements, explaining differences by referring to capital employed. </li></ul><ul><li>Explain business risk, sensitivities and “hotspots”. </li></ul>
    11. 11. Tips for a solid business plan - 3 <ul><li>Look at it as if you were being asked to invest. </li></ul><ul><li>Explain how the plan will be monitored. </li></ul><ul><li>Be clear about fixed and variable costs, short and long-term commitments. </li></ul><ul><li>Understand the various sources of funding. </li></ul>
    12. 12. Tips for presenting your business plan <ul><li>Be well prepared. </li></ul><ul><li>Explain your track-history. </li></ul><ul><li>Be honest. </li></ul><ul><li>Understand what the lender wants. </li></ul>
    13. 13. Getting finances right <ul><li>Develop an appropriate and useful business record-keeping system </li></ul>
    14. 14. Business record keeping - benefits <ul><li>Improved control </li></ul><ul><ul><li>e.g. Credit control </li></ul></ul><ul><li>Improved decision-making </li></ul><ul><ul><li>e.g. Customer pricing </li></ul></ul><ul><li>Improved planning </li></ul><ul><ul><li>e.g. Investments and cashflow forecasting </li></ul></ul><ul><li>Confidence </li></ul><ul><ul><li>you know why you have so much or so little money in the bank </li></ul></ul>
    15. 15. Business record keeping - principles <ul><li>Use bank accounts and credit cards solely for your business </li></ul><ul><li>Have a clear audit trail </li></ul><ul><li>Ask you accountant for advice on record-keeping systems </li></ul><ul><li>Talk to your accountant a month before your year-end about debtors, creditors and documentation required. </li></ul>
    16. 16. Business record keeping - options <ul><li>DIY </li></ul><ul><ul><li>Manual </li></ul></ul><ul><ul><li>Excel </li></ul></ul><ul><ul><li>On-line </li></ul></ul><ul><ul><li>Sage50 </li></ul></ul><ul><li>Accountant managed </li></ul><ul><ul><li>On-line </li></ul></ul><ul><ul><li>Sage50 : from prime documents </li></ul></ul><ul><ul><li>Sage50 : client input </li></ul></ul>
    17. 17. Management Accounts <ul><li>Management accounts report trading performance (P&L Account), capital employed (Balance Sheet) and cashflow </li></ul><ul><li>Cashflow is the result of profit and how much money is tied up in the business </li></ul>
    18. 18. Trading account analysis <ul><li>Supports decision-making (fixed asset investments, marketing projects, new products/markets. </li></ul><ul><li>Prevents expenditure drift </li></ul><ul><li>Break-even point analysis </li></ul><ul><li>Allows benchmarking </li></ul><ul><li>Makes obtaining finance easier and the business more valuable </li></ul>
    19. 19. Cashflow <ul><li>Cashflow is the change in your bank balance. Sole traders will add back drawings to measure the business cashflow. </li></ul><ul><li>Most businesses measure cashflow... Fewer businesses explain cashflow... Fewer still predict cashflow </li></ul><ul><li>Cashflow is important as poor cashflow rather than poor profitability can be fatal </li></ul>
    20. 20. Working capital <ul><li>It is influenced by the “speed” of the “production” cycle and the strength of the supply chain. </li></ul><ul><li>How quickly you invoice and how quickly you get paid. </li></ul>
    21. 21. Speeding up customer payments (1) <ul><li>Only trade with businesses that can pay </li></ul><ul><li>Take every opportunity to publish your trading and payment terms </li></ul><ul><li>Invoice immediately, send invoice by post and e-mail </li></ul><ul><li>Make sure systems exist to prevent invoicing delays (sales pricing system) </li></ul><ul><li>Send reminder before payment is due </li></ul><ul><li>Offer a variety of payment methods </li></ul>
    22. 22. Speeding up customer payments (2) <ul><li>Put your bank details on all invoices and statements </li></ul><ul><li>Reward prompt payment / discourage late payment </li></ul><ul><li>Find out who will authorise payment </li></ul><ul><li>Explain that your prices do not include administration cost to collect late payment. </li></ul>
    23. 23. Speeding up customer payments (3) <ul><li>Have a collection routine and stick to it </li></ul><ul><li>Be firm but polite when requesting payment. We are all busy and sometimes things get missed. </li></ul><ul><li>Involve a 3 rd party when required </li></ul><ul><li>Management attention </li></ul>
    24. 24. Warning signs <ul><li>The sudden big order </li></ul><ul><li>Broken promises/non-availabilty </li></ul><ul><li>Requests for extended payment terms </li></ul><ul><li>Deteriorating payment performance </li></ul><ul><li>External information (e.g. Google) </li></ul>
    25. 25. VAT registration illustration
    26. 26. Payroll <ul><li>Must run where employees earn above NI LEL limit. </li></ul><ul><li>Strict definition of casual employees </li></ul><ul><li>Beware of paying net and grossing up </li></ul>
    27. 27. Other common questions <ul><li>What can I claim </li></ul><ul><li>Using own car </li></ul><ul><li>Use of home </li></ul>
    28. 28. TaxAssist Accountants 01743 366669 <ul><li>1 Sundorne Avenue, Shrewsbury. SY1 4JW </li></ul><ul><li>[email_address] </li></ul><ul><li>www.taxassist.co.uk/shrewsbury </li></ul><ul><li>http://taxassistshrewsbury.wordpress.com </li></ul><ul><li>http://twitter.com/taxassist_shrew </li></ul><ul><li>http://www.facebook.com/pages/TaxAssist-Accountants-Shrewsbury/110149602385926 </li></ul>

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