Finance in Dorset 2017 - Start Up Session

Finance in Dorset
Sam Chapman, Partner
Businesses trading for < 2 years…….

pkf-francisclark.co.uk
Structure of morning
• Background, Equity, Debt and Business Support (8.30am to 10am)
• Dorset Chamber
• Banks: an overview
• Equity and Grants
• Growth Hub
• Coffee Break (10am to 10.25am)
• Funding, Business Support, Investment Ready and SME
perspective (10.25am to 12noon)
• Start Up (trading for < 2 years)
• or Established Business
• Lunch and Networking (12noon to 1pm)

• Business structure: Sole trader
Partnership
Limited Company
• Red Tape: HMRC registration
Accounting systems
Pensions and Auto-Enrolment
• Ongoing services: Payroll
Management accounts
Tax planning/remuneration strategies
Issues facing start up businesses

• Strategies for growth: Business plans
Cash flow projections
Acquisitions/disposals of
trade or assets
Grant funding
• Tax opportunities: R&D
Patent Box
Utilising taxable losses due to
CA’s and investment
Issues facing start up businesses

• 10 minute presentations on:
• Start Up Loans
• SEIS/EIS
• Investment ready x 2
• Cloud accounting
• University support
• Support for exporters
• SME Perspective
Funding and support – for business < 2 years old

SWIG Finance
Start Up Loans
Peter Casey

• Government-backed low interest
loan (6%)
• Free business support
• £500 to £25,000
• Repayable up to 5 years
• Trading up to 24 months
• Loans to business owners
• Can include business purchase

Operating across the South West
Over 1,000 entrepreneurs with
over £7.3 million in 4 years

Our clients are Award Winning!

Thank you for listening.
www.swigfinance.co.uk
info@swigfinance.co.uk
01872 223 883

Investment Ready
Richard Wadman

Structure
Selecting the right funding
• Options
• Choosing
Getting ready
• General
• Specific

.
Selecting the right funding: Options
Equity Debt Grants
Crowdfunding

Selecting the right funding: Choosing
Understand
funding
options and
funders
requirements
Understand
your
requirements
• Competitive
process
• Tailor your
pitch but do not
change your
your business
model to fit
• Know the deal
breakers: theirs
and yours

.
• Business plan
• Projections
• Housekeeping
Getting ready: General

.
• Industry & current
operations
• Future strategy
• Communicates
“business case”
• Professional
• Especially important for
start-ups
• Tailored
Business plan

.
• Realistic
• Supported
• Add up
• Underpin business case
• Profit & Loss
• Monthly
• Cash flow & balance sheet
• Cash headroom
• Sensitivities – Negative &
Positive
Projections

.
• Licences / contracts
• IP ownership in the company?
• Books and records in order?
• Tax VAT, PAYE/NI
• Statutory Accounts/management accounts
Housekeeping

.
• Equity
• Debt
• Grants
• Crowdfunding
Getting ready: Specific

.
Equity: Funders requirements
• Growth
• Often no market so are “locked in”
• Exit route and returns to the investor

.
Equity: Getting ready
• Be prepared to discuss valuation
• Investors expertise vs. loss of independence?
• Passive / active?
• Restricted matters?
• Potentially more subjective: softer skills /
enthusiasm / excitement
• SEIS/ EIS

Debt: Funders requirements
• Cash flow – serviceability / headroom / sensitivity
• Security / personal guarantees
• Covenants – achievable / appropriate
• Government initiatives – eligibility

.
Debt: Getting ready
• Numbers and accounts in order
• Projections
• Credit rating
• Shop around

• Project – i.e. usually not for general expenses
• “Project” eligibility – sector, size, location…
• Ongoing compliance
.
Grants: Funders requirements

.
Grants: Getting ready
• Timescale – prescriptive, process and panels
• Match funding
• Competition
• Cash flow – claim in arrears
• Admin
• Patience

.
Crowdfunding
• Debt / equity, subject to
conditions
• “Reward”
• Variety of platforms
• Opportunity for exposure &
feedback
• Marketing / enthusiasm for
business
• Different but the same…

An Introduction to Cloud Accounting
Sam Chapman: Partner March 2017

Contents
• What is cloud?
• And cloud accounting?
• So, why?
• Demonstration
• Anything else?

What is cloud?
..
What is it?
Cloud technology is
simply to host, or store, data
remotely rather than on a
machine at your premises.

.
And cloud accounting?
• Multi-user & multi-location
• Immense server processing power
• Machine learning
• Application programming interface (API)

So, why?
• Time = Money
• Time saved on your books is time to invest in your
business.
• Make business decisions based on real time data.
• Automated bank feeds
• Invoice recognition
• Dashboards
• Management accounts

Automated Bank Feed

Processing Power

Image Recognition

Image Recognition!

Dashboards

Dashboards!

Management Accounts

Anything else?
• Cash
• Automate invoicing and debt collection
• Sell your debtor book
• Pre-approved in-app finance?
• Integrated business solutions – link:
• Website, PayPal, Stock Management, CRM, etc.

.
Who to contact?
Jessica Tubbs MAAT
Head of CloudSourcing, East Region
Jessica.tubbs@pkf-francisclark.co.uk
Sam Chapman FCCA
Partner
Sam.chapman@pkf-francisclark.co.uk

SEIS / EIS
Julian Smith

Equity Investments
- Cash invested into a company in the form of
subscribing for shares
- Most commonly, shares are either ordinary or
preference shares
- Understanding what it means by giving up an equity
stake in the business
- Tax incentives on offer for certain investments in
ordinary shares

pkf-francisclark.co.ukpkf-francisclark.co.uk
.
SEIS / EIS
• Equity Incentive Schemes – offer of tax incentives to
investors to encourage investment in start up / relatively
new businesses
• Often considered where debt cannot be obtained (or only
offered on unattractive terms)
• Given up an ownership stake in the business – how much
are you willing to give up?
• HMRC’s view is that the schemes are aimed at companies
with a high financial risk

pkf-francisclark.co.ukpkf-francisclark.co.uk
.
Tax relief for investors
Relief SEIS EIS
Income tax relief 50% (max inv. £100k) 30% (max inv. £1.0m)
CGT exemption Yes – after 3 years Yes – typically 3 years
from date of issue
CGT deferral No Yes
IT loss relief Yes - potentially Yes - potentially
BPR Yes Yes
The above are subject to conditions and rely on continual qualification in
the period after the issue of shares.

Seed Enterprise Investment Scheme (“SEIS”)
• Companies where trade is less than 2 years old
• Up to £150k can be raised through the issue of SEIS shares – limit
reduced by any other State Aid received in the 3 years preceding the
issue of SEIS shares
• New shares must be issued in return for ‘new’ cash
• Cash used for the purposes of a qualifying trade and spent within 3
years of the share issue
• Individual investors cannot be connected with the company
• Less than 25 employees / no more than £200k gross assets
• Numerous other conditions

Enterprise Investment Scheme (“EIS”)
• Typically for companies < 7 years old
• Can raise no more than £5m in any 12 month period – includes
from any venture capital scheme and other state aid investment
e.g. certain grants
• New shares must be issued in return for ‘new’ cash
• Cash used for the purposes of a qualifying trade and spent within
2 years
• Individual investors cannot be connected with the company
• Numerous other conditions

Practical considerations
• Is your company carrying on a qualifying trade?
• Applying for advance assurance to give investors certainty.
• Method for attracting investors – business angels, crowdfunding,
equity funds
• Valuing the company and offer price
• Professional costs
• Steps to ensuring and monitoring compliance e.g. separate bank
accounts
• Dual SEIS / EIS offer

Investor Ready : approaching
the bank
Practical tips
Mike Isaacs
Relationship Manager
NatWest Business Banking
The content of this document is
classified as PUBLIC

03/03/2017
classified as INTERNAL50
Mike Isaacs
Security may be required. Product fees may apply. Over 18’s only. Business Turnover of up to £2 million.
Excludes refinance and Commercial Real Estate Finance
Any property used as security, which may include your home, may be repossessed if you do not keep up
repayments on a mortgage or other debt secured on it

Assessing an application, what do we look at?
03/03/2017
You1
Contribution2
Business plan and Forecasts3
Affordability4
Credit history5

03/03/2017
You
Why do you want to set up in business?
Support network
Contingency planning
Strengths and weaknesses

03/03/2017
Contribution
Typically 50% contribution
Demonstrates commitment and confidence in your project

03/03/2017
Business plan
Competition
Route to Market
Advertising and Marketing
Your background
Breakdown of costs
SWOT analysis

03/03/2017
Affordability
Cash Flow Projections
Assumptions
Seasonality
Cost of your product
How much you expect to sell
Wages
VAT
Loan repayment figures

03/03/2017
Summary
Have some cash behind you to get started
Have written a detailed Business plan and be prepared to answer questions about it
Have prepared a realistic Cash flow projection
Have sought help from professionals should you need any help with preparing the necessary information

03/03/2017
Boost your Business with NatWest
Lucy Kitcher
Business Growth Enabler
lucy.kitcher@natwest.com
07785 636336
T:LucyKitcher2
Each month we host the Boost Board which is a free event open to local businesses looking to grow.
2nd Wednesday monthly – 8th March
9.30 -11.30
The Factory, Alder Hills
Details are on Eventbrite or ask Lucy.

Regional Economic Engagement
Prof Nigel Jump

What we do
Education Research
Professional
Practice

Connectivity Of Our Strategies
Regional
Economic
Engagement
Community &
Civic Regional
Engagement
Global
Engagemen
t

How do we interact with
Industry and Commerce?
• Via Knowledge exchange (KE), a process which
brings together academic staff, users of
research and wider groups and communities to
exchange ideas, evidence and expertise.
• Overall aim is to contribute to economic, social,
cultural and environmental benefits to society.

Strategic &
International
Partners
Incubator
Public Engagement
Business
Intelligence
Reports
Festival of
Learning
Festival of
Design &
Technology
Festival of
Enterprise
BFX Festival
Inaugural
Public
Lectures
General
Interest
Seminars
Regional
Economic &
Environmental
Impact Model
Data
Portal
Round Table
Discussion
Groups

Research, knowledge
exchange and CPD
Research
• Global Security, Finance, Economics, Tourism,
Health, Creative and Digital, Engineering,
Environmental Science and many more…
• All Faculties offer CPD opportunities

Funding Opportunities
• Knowledge Transfer Partnerships (KTP)
– 3-way project partnership
– Match-funded PhDs
• SMART awards
– Proof of concept
– Proof of market
– Development of prototypes
• European Funding
• Horizon 2020

Student Interaction
• Placements and Careers
– 100% students offered placements
– 92% of graduates are employed or in further study
within 6 months of graduation
• Student Project Bank

Student Project Bank
• Launched February 2016
• External projects needed for students to work
on as part of their academic studies
– Cannot be business-critical
• Student-centred initiative
• Benefits students and Industry sponsors

Our Commitment
To help create a prosperous, economically
dynamic and sustainable regional economy.
To identify and support development
opportunities that will add to the region’s
economic capacity and wealth.

Andrew J Large CMA
International Trade Adviser
Your Partner for International Trade
07469 391222
andrew.large@mobile.trade.gov.uk
Export for Growth: ERDF

New support programmes for SME’s
Knowledge
Knowing what to do – and why do it
Skills
Knowing how to do it – and with what
Confidence Readiness Effectiveness
Baseline Service
Export Savvy
Trade Development Support
E-Commerce
Export Opportunities
OMIS
High Value Opportunities
Events and missions
DITCore
Export
Essentials
Ready for Export (Workshops)
Market Research Scheme
IP Assessment Scheme
Investment & Funding Scheme
International Mentoring Scheme
Overseas Visit Support
Digital Marketing Scheme
Grant Funding
New
(New/NoviceExporters)
Extend your
Global Reach
High Growth Market Support
Market readiness & planning
Sales & Marketing Strategy
Commercial development
Risk assessment
Market visit preparation
Market entry support
In-country commercial
assistance
New
(ExperiencedExporters)

Export for Growth/ERDF Summary
• Three+ year Project 2016-2019 focused on SMEs across 6 LEP
areas in the South West
• Purposes to……
• Help more first time exporters
• Help existing exporters enter growth markets
• Create new jobs.
• New support programmes & possible (no Guarantee) Grant.

Eligibility
SMEs in designated LEP areas - priority given to LEP selected sectors
• Export Essentials
• Propensity to export characteristics
• New or novice exporter
• Extend your Global Reach
• Experienced exporter with potential of £5m turnover+
• Potential to compete in LatAm, India, China or SE Asia
• Investment in market development £30k+

Support Delivery Timeline
Closed
Available
Ready for
Export
Workshop
Market
Research
IP Advice Market
Visit
Advice
Digital
Marketing
Enterprise
Mentoring
Finance &
Investment
Extend your
Global Reach
Grant
Funding
Ongoing Ongoing N/AOngoing Ongoing Jan
2017
Jan
2017
Ongoing Three
Windows
In 2017
International Trade Advisers
providing tailored support throughout the project

• Focused on new to export SMEs
• International Trade Adviser (up to 24 months)
• Ready for Export - 1 day induction workshop
• Up to 36 hours support from 3 of the 6 Schemes……
• Eligible to apply for grant up to £30K
Export
Essentials
Mentoring
Scheme
Market
Research
Scheme
Intellectual
Property
Scheme
Digital
Marketing
Scheme
International
Market Visit
Scheme
Funding &
Investment
Scheme
Export Essentials
Customised

Consultative support focused on growth markets
• Latin America, China, India and South East Asia
• Overseas Market Specialists combined with outsourced in-
territory sales and marketing support
• Up to 12 days consultancy
Extend your Global Reach
Extend your
Global ReachOMIS
4
Market
Readiness
Assessment
Research &
Planning
Sales &
Marketing
Strategy
Preparation
and risk
assessment
Market Entry
Support

Ready for Export – One Day Workshop (Voluntary)
Facilitated by professional trade advisers
Ready for
Export
Workshop
Sessions that explore:
• export success stories
• clarifying and setting export goals
• addressing fears about export and gaps in
knowledge
• develop understanding of key areas for
business and personal development
• key steps to take with an action plan
created on the day
Followed through with a local International
Trade Adviser

1. Funding and Investment Advisory Scheme
Specialist support to help navigate the labyrinth of funding and
investment sources through one of two options available
• Attend Funding and Investment clinics
• Full review of needs with specialist advice
on best ways to access funding, finance and
investment
Funding and
Investment
Scheme

2. Digital Marketing Support Scheme
One-to-one specialist support to provide insight into the potential of
digital marketing and show you ways to maximise its potential
• Gain deeper insight by joining a Digital
Marketing master class or clinic
• Follow up with one-to-one on how to
maximise Digital Marketing with access
to a specialist
Digital
Marketing
Scheme

3. International Market Visit Advisory Scheme
International
Market Visit
Scheme
• Advice and guidance for overseas trade shows, exhibitions and seminars
• Facilitate pre & post-visit support aligned to OMIS
• Coordinate overseas visit including liaison with
UKTI post in market, Embassy and OBN
• Facilitate pre and post-market visit briefings
• Assist with planning and travel arrangements

4. International Mentoring Scheme
One-to-one business mentoring for between 6-12 months
International
Mentoring
Scheme
• Explore personal and professional situation
• Develop strategies and goals for positive
impact on business development
• Release and develop resourcefulness
• Explore variety of options to consider
alternative actions in order to solve problems
Using SFEDI (Small Firms Enterprise Development
Initiative) accredited mentors, the
Government-recognised UK Standards Setting
Body for Business Support

5. International Trade Research Scheme
Specialist support and face to face advice about market research,
market selection and desk-based market research
• Full review of market research needs
• Support on how to effectively use market
research to determine export strategy, plan
research projects, source published reports
and other sources of information
• Facilitate support for market research and
advice on market entry and market
development strategies
• Free desk-based market research and
report for selected market
International
Market
Research

6. Intellectual Property Protection Scheme
Specialist adviser to help SMEs navigate the complexities of IP
• One-to-one IPR clinics run locally (duration 1
hour) learning about IP and how to get the
right protection for your company
• Face to face company visit from an IPR expert
who can undertake a comprehensive review
and audit of your current and future
protection needs. A detailed report containing
advice, recommendations and guidance on
appropriate action to take
Intellectual
Property
Protection
Scheme

Finance in Dorset
Mitchell Stuart

Founder & MD: Inferno Media
Social Media Wiz
20 Years Old
GCSE School Drop Out

“It’s hard to beat a person who never gives up.”
- Babe Ruth, Baseball Legend

Virgin StartUp - Numbers
£20,000 fixed 6% over 5 years
Monthly payments of £390
Putting £5k away for the 1st year

mitchell@Inferno.Media
www.Inferno.Media

Thank You!
Mitchell Stuart
mitchell@Inferno.Media
www.Inferno.Media

Finance in the South West – wrap up
Sam Chapman, Partner

.
Summary
• Dorset is a great place to do business and
has great businesses
• Dorset is full of entrepreneurial spirit
(businesses and funding options)
• Funding and business support here…
• http://www.francisclark.co.uk/news-views/blog
• Thank you

Presentations
And more… (24 presentations in total, covering “full range” of funding and business support options)

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Finance in Dorset 2017 - Start Up Session

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