All things business - how to bootstrap your business by doing the right things that don't cost you heaps of money. Validation that your business is professionally run gets you noticed. Be aware - I am NOT a qualified solicitor, am not offering legal advice, accountancy advice or health and safety advice - I am only saying that you need to be aware - so ask!

1. Managing your
business

2. Why this stuff matters

3. Fines

4. The positives
• Protect ideas
• Protect property
• Protect assets
• Protect reputation
• Protect employees
• Protect YOU

5. Better to do it early rather than
regret it later on.
Business and the law
• Formation
• Trading
• Employment
• Health and Safety
• Licensing
• Contract law
• Data protection
• Intellectual property
• Financial record keeping
Caveat – I am not a lawyer, an
accountant or health & safety
expert. If in doubt please use
the professional most suited to
your concern.
It may seem
that you are
having to jump
through hoops

6. Formation
Advantages
• Easy in – Easy out - just go
online
• Profits yours after deductions
and tax
• Simple financial reporting
• National Insurance – Class 2
(£6,025) and Class 4 (£8,164)
• You are the business
https://www.gov.uk/national-insurance/what-national-
insurance-is-for

7. Formation
Disadvantages
• The debts are all yours
• It’s down to you
• It’s harder to get investment
• How do you sell something
that’s all you?

8. Formation
A way two or more people can
run something together
Advantages
• Easier to bring in more money
• Shares the workload
• Ideal for bouncing ideas around
• Share the costs
Have a legal partnership agreement drawn up
https://www.gov.uk/set-up-business-partnership

9. Formation
Disadvantages
• Share the profits – each pay their
proportion of tax
• Each partner personally liable for
there own debts
• Two tax returns – partner return
and personal return
• You must include all the partners’
names and the business name (if
you have one) on official
paperwork, for example invoices
and letters.

10. Formation
Congratulations you have just
had a baby! It’s not a bad
metaphor
Advantages
• Credibility – want to win a
contract?
• Looked upon better for
finance (after 3 years)
• Exit strategy – that little bit
easier
• Liability limited to your
investment – rather than
any debts the company
may have
• Tax advantages – less so
• Better continuity in
transitioning

11. Formation
Disadvantage
• Annual accounts more
complex
• Articles of Association
and Memorandum of
Association required
• NI obligations potentially
greater – employers and
directors
• Harder to exit –
shareholders to consider,
cessation of business
accounts
• If company can’t pay the
bills involvement of
insolvency practioner may
be needed
Please consult an accountant of good
standing if you are unsure
https://www.icaew.com/about-
icaew/find-a-chartered-accountant

12. And there is more!
Limited Liability Partnership
Trades as a limited company (same protection for all) and is
flexible like a partnership so make sure you have a solid
partnership agreement in place. This is more than a % holding this
is a statement of working practices, accountability and considers
future events. A good agreement is one that considers the
unpalatable before it becomes the unspeakable.
Community Interest Company (CIC)
Trades as a limited company and reports additionally to the CIC
Regulator . There is no rule that it cannot have shareholders, or
that it must by limited by guarantee (i.e. have members). It is held
to a higher reporting standard with directors remuneration to be
visible in the reporting also it must report social outcomes. A
limited company can become a CIC but not the other way round.
There are restrictions on the transfer of assets (asset lock) and
dividends can be taken but these are capped. The main reason
why you would want this structure is to highlight the social nature
of the enterprise. It does not entitle you to grant funding but it
opens the door to greater opportunity
More details look at
https://www.gov.uk/government/organisations/office-of-
the-regulator-of-community-interest-companies

13. Decision time
What would you suggest?
Dawn and David, a married
couple, are opening a tea room in
their local village. Both were
teachers, Dawn maths and David,
history, they have taken early
retirement and want to work within
their village. They have found the
property and are renting it on a
short term lease. They are
investing their own savings into
the venture and will be running it
themselves, though they expect to
have to employ someone on a
Saturday.
What company formation should
they consider and why?
What advice would you give them
as a couple working together?
Who might they know in their
immediate networks who could
help them get a leg up?

14. Some food for
thought
• No borrowings
• Just the two of them
• They are married
• No dependents
• Leasing rather than
buying
This Photo by Unknown Author is licensed under CC BY-SA
My suggestion - Partnership
– might be a good option in
respect of tax*. I wouldn’t
suggest incorporation at this
stage. If the business were
to develop – maybe?
What should partnership
agreement contain?
* Accountant

15. What’s in a name?
Three Golden Rules
• It’s not already in use – search
engines and company house
• It does not contain words that
can be misconstrued, does not
form an unpleasant anachronym
or imply Government connection
• Means something completely
different in another language

16. It’s a confusing
issue
• Buying a website
domain is NOT
registering a company
• A sole trader or
partnership does not
have to register a
trading name
• Trade marks – if they
are important to you
then do a search
(https://www.gov.uk/sea
rch-for-trademark) for
what’s out there and
register.
(https://www.gov.uk/ho
w-to-register-a-trade-
mark/apply)
• If you incorporate, the
name you provide
Companies House does
not have to be the
Trading Name
(https://www.gov.uk/limi
ted-company-
formation/choose-
company-name)

17. Trading – The Sale
of Goods Act 1979
& Supply of Goods
and Services Act
1982
In general the Acts say
• You must have the right to sell the goods
• They are fit for purpose
• Of satisfactory quality
• You are reasonably skilled at delivering the
service with care
• Packaged appropriately and described
accurately
• Commercially fair
• Never sold by misleading the buyer
• Never aggressively sell with fear or malice
• Can be delivered in a reasonable time (unless
otherwise agreed)
• Have a reasonable charge (unless otherwise
agreed
When we sell in a persons home or at a distance
there must be a cooling off period (7 Working Days)
Never a bad idea to have T&C’s in writing that cover delivery,
terms of trade, mutual obligations. Any questions go to
http://www.legislation.gov.uk/

18. Terms and Conditions
“Ts & Cs”
They help reassure your
customers, they provide
some certainty and set
expectations, avoid
confusion and give you
some protection.
• B2B – negotiation
tends to be case
specific
• Bring them to the
customers attention
• Encourage the
reading of them
• Explain the
complaints
procedure
Remember as soon as you
‘sell’ a good or service a
contract exists regardless
of any paperwork or
communication

19. Decision Time
Dawn and David like the name The Ye
Olde Tea Room but they know that the
next village there is a Ye Olde Gift Shop
and they are concerned that this might
be considered wrong.
What advice might you offer?
They are both keen only to serve ethically
sourced goods, including Fairtrade
beverages, organic dairy products and
locally sourced cheeses, hams and meats.
They are also aware that they want to
stand out from the crowd and want to put
together some Ts&Cs.
What might they include and how might
they display these?

20. Invoicing
Limited Company Sole Trader VAT registered
Full company name as it
appears at Companies
House
A business name if used – if
you are not using your
surname
A unique invoice number
Trading Name (must not
include Ltd or Limited)
An address where contact
can be made and legal
documents sent
Customers name and
address
Registered address and
contact details
Total amount due Total amount owed
excluding VAT & amount
including VAT
Company letterhead
including registration No &
place of incorporation
When payment is due Applicable % rate – zero,
exempt or outside scope
When payment is due Optional & recommended Name and address of
business
Optional Unique number VAT Registration number
Directors names (all)
A unique number
https://www.gov.uk/invoicing-and-taking-payment-from-customers

21. • Threshold for compulsory
registration an annual turnover of
£85,000
• Benefits of early / voluntary
registration
• Downside of early / voluntary
registration
• VAT rate – 20% standard goods &
services; 5% reduced rate
• VAT flat rate – for small
businesses with a very low cost of
sales and VAT turnover below
£150,000
This Photo by Unknown Author is licensed under CC BY-ND
Seek professional advice – getting it wrong
can cost you a lot
https://www.gov.uk/vat-businesses/vat-
rates
https://www.gov.uk/vat-flat-rate-scheme

22. Decision Time
Dawn and David have now started to set up their café /
restaurant and they are going to have to make some
assumptions. As a cafe they know that they will have to
register for VAT but think this a long way away.
There is room for 12 tables each accommodating 4 people
giving a maximum capacity of 48 people per sitting.
They have decided that they will do just one breakfast
sitting, two lunch and two afternoon teas. They have
worked out there menu and based on their experience
they have calculated an average cover price of £6-00, for
breakfast, £9.00 for lunch and £5.00 for afternoon teas.
They know they will have to work hard. They will work 6
days a week but at the moment they think, so long as they
give warning to their clients, they can close in off peak
times for 6 weeks of the year, that way they can get in a
cruise and a trip to see the family. So they will be open for
46 weeks of the year or 276 days
David is a bit of a jazz buff and wants to run Jazz night -
once a month and offer a meal - he anticipates the ticket
price as £25-00 per person.
They need your help - should they register for VAT?

23. Analysis
Sittings Max
Capacity
Cover
Price
Max Daily
Revenue £
Max
Yearly
Revenue
based off
276 days
Breakfast 1 48 people £6.00 £288
Lunch 2 96 people £9.00 £864
Afternoon
Teas
2 96 people £5.00 £480
Total £1,632 £450,432
Events 12 per year 48 £25 £14,400
Total £464,832
12 Tables x 4 People =a maximum of 48 People per sitting

24. Excited or what!
Dawn and David nearly fell
off their chairs when the did
the numbers – they couldn’t
stop laughing. But then the
realisation kicked in this
was ‘maximum’ – too much
and not realistic. They
started to work the numbers
again and realised that they
were going to be a lot less
busy than that.
At what % of capacity do
they meet the VAT
registration threshold?

25. Analysis
Ann.
Revenues
Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5
% of Max 18% 35% 45% 65% 70%
Breakfast £ 14,904 £ 28,152 £ 36,432 £ 51,336 £ 56,304
Lunch £ 44,712 £ 84,456 £ 109,296 £ 154,008 £ 168,912
Afternoon
Teas
£ 24,840 £ 46,920 £ 60,720 £ 85,560 £ 93,840
9 People
Per event
17 People
Per event
24 People
Per event
31 People
Per event
34 People
Per event
Events £225 £5,100 £6,600 £9,300 £10,200
Total £ 84,681 £ 164,628 £ 213,048 £ 300,204 £ 329,256
Plenty of assumptions here not least that they can cover the workload. These
numbers are not profit they are revenues (inc. VAT)

26. Employment
You have an implied ‘duty of care’ as an
employer this means YOU are responsible
for their physical and emotional welfare.
You need to consider the following:
• Written contracts
• Employer liability insurance
• Employee regulations
• Duty of care (H&S)
• Paying the National Minimum Wage
• PAYE Scheme and Auto Enrolment
• Maternity and Paternity pay
• Gender equality
• Never discriminate
An employees statutory rights
www.acas.org.uk

27. The Employment
Rights Act 1996
You must provide a written contract within a two
month time frame of staff start date. This information
must include:
• Name and address of employer
• Name of Employee
• Job title and a brief job description
• Place of work
• Hours of work
• The pay, frequency of payment
• Holiday pay and entitlement
• Sick pay arrangements
• Pension arrangements
• Length of notice
• Expected length of employment for non-
permanent staff
• Fixed term – show end date
• Grievance and appeals procedures
• Any expected or desired antisocial working
practices
• Social media policy – what’s expected

28. Use of
Independent
Contractors
Growing your business with
contractors can make great
sense – initially. But be
careful you do not fall counter
to IR35 – a piece of
legislation designed to stop
employers avoiding tax and
circumventing employment
law.
In essence if someone
working for you is being
treated as self-employed, or
delivering services to you
through a limited company,
just make sure they are NOT
an employee by any other
name.
Make sure you have a contract, keep accurate records and do
not blur any line – fines can be heavy and backdated
https://www.gov.uk/employment-status/selfemployed-
contractor

29. Some advice to
stay legal
Here are some pointers you should consider
prior to starting the relationship with a
contractor:
1. A good contract will have all the legal or tax
requirements to ensure that you satisfy the
rules on substitution, level of controls, who
pays tax etc. It should also have an
indemnity if the worst happens and HMRC
come after you as the business for
contractor’s taxes.
2. The emphasis is on the contractor as much
as possible, to get their tax situation clear
implications.
3. Require invoices for work done. Have a
project based payment system that relates
the payment to stated outcomes and
delivery
4. Where appropriate you should make sure
they carry their only professional
insurances.
5. Do not provide them the tools to do the work
– they must provide these themselves
6. Lack of work, a clearly identified end of a
project should enable the contract to lapse
and the relationship be mutually terminated
7. They should never be restricted from
earning income elsewhere, if suitable
encourage them to seek another revenue
stream
8. Do not force working times on them of
course they must be able to work to the
clients time table.
9. Providing them with uniforms or an
employee handbook with policies in them is
not permitted
10. Do not pay them holiday or sick pay.
11. Allow them to be able to substitute
themselves for someone else if suitable.

30. A Final Word on
Employing People
Treat people fairly, build
advocates for your business,
educate, encourage and promote.
Your business is not your
business it’s THE BUSINESS and
employees carry this forward.
Having good policies in place, a
great induction process, rewards
and structures that create
engagement means your talent
pool is that much bigger than all
those others.

31. Health and
Safety
You are liable for the wellbeing of people
whilst at work – that means providing a
safe and secure working environment.
1. Identify possible hazards – carry out
assessments
2. Train people – gain competent
advice
3. Identify who might be harmed and
how
4. Evaluate the risk, likelihood and
degree of hazard, measure to reduce
5. Keep a documented record of
accidents, hazardous events
6. Induction must include H&S
practices
This Photo by Unknown Author is licensed under CC BY-NC-ND
Look at the HSE website www.hse.gov.uk

32. Some advice
Dawn and David think that with a couple of staff
on the books the prospects for revenue and
working at a higher capacity are good. As retired
teachers they have never employed someone
directly.
What do you think they should consider?
How would you suggest they progress?
Dawn knows there is person in the village who
bakes amazing cakes. She has spoken to them
and they are interested in the work but they do
not want to work for anyone else. Should Dawn
employ them or ask them to set up as a
business themselves.
What might they have to consider in either
case?

33. Licensing
You might need a license to trade. For food
businesses regulations are strict so look at the
Food Standards Agency. You need to register
28 days before trading, so you need to be
prepared (https://www.food.gov.uk/business-
guidance/registering-and-managing-a-food-
business)
If you in doubt check out the following website
https://www.gov.uk/licence-finder
It is scary stuff given how many licenses exist.
This Photo by Unknown Author is licensed under CC BY

34. Contract
Law
Complicated and
undeniably obscure for
many of us. That is why
the legal profession exists.
Even if you think you know the
answer still consult a solicitor
http://solicitors.lawsociety.org.uk/
Sometime their initial advice can
be free or subsidised. Have a word
with Colbea or become a member
of FSB

35. Data Protection
GDPR
You must have a lawful bases for
processing personal data – this will likely
depend on the relationship you have and
the purpose for the data. If you could
achieve the same result without accessing
the data – why are you storing and
accessing it? The lawful bases for holding
and accessing data are:
1. Consent
2. Contract
3. Legal obligation
4. Vital interest
5. Public task
6. Legitimate Interest
Two good resources - https://www.fsb.org.uk/first-voice/a-small-business-
checklist-for-gdpr and the original source https://ico.org.uk/for-
organisations/guide-to-the-general-data-protection-regulation-gdpr/lawful-
basis-for-processing/

36. GDPR
(Cont.)
• If you hold data you need to have
someone who is the Data Protection
Officer (that’s you!)
• Everyone has more ‘rights’ than
before – the right to cancel, the right
to be informed, the right to object etc.
How will you deal with these?
• Where is the data stored and how are
you protecting it? Encryption, cloud
based CRM, suitably robust virus
software etc.
• Do you have a GDPR policy
document – well at least a well
thought through document that says
how you will handle a data breach
• Register with the ICO – it’s cheap and
a resource.
• If you are doing a lot of data
management it might not hurt to get
an expert in to audit and suggest how
you can become more compliant.

37. Protectors - Patent
A patent for an invention is
granted by government to
the inventor, giving the
inventor the right to stop
others, for a limited period,
from making, using or
selling the invention
without their permission.
https://www.bl.uk/business-and-ip-centre/articles/what-is-a-patent

38. Protectors –
Trade Mark
Trademarks are badges of origin that
distinguish the goods or services of one
trader from another. They can take many
forms; for example words, slogans, logos,
shapes, colours and sounds.
There are 45 classes that exist to
distinguish between different groups that
could share the same name. For example
it is possible for others to register an
identical or similar mark as long as it is in a
different, unconnected class.
An example could be Swan Matches,
Swan Electricals and Swan Cars –
The IPO is the official government body responsible for granting
Intellectual Property rights in the United Kingdom. Can be contacted by
phone - 0300 300 2000

39. Protectors -
Copyright
This protects original works whether
they are written, visual, audible –
they do not protect an idea. If you
write original content then make
sure you document its origins.
Equally if you contract out work to
another then, unless the contract
says otherwise, the contractor will
likely have the copyright. If you have
an employee and you pay them to
write content, design things, then as
the employer you should have the
copyright.

40. Protectors -
Design
Registration
It is a cheaper means by
which you can protect the
appearance of your product.
You will need proof of when
you created your design
also to register you must
meet certain criteria
Worried about your
designs and IP? Then start
the process early with an
Patent solicitor. See also
https://www.gov.uk/design-
right

41. Financial Record
Keeping
Rules
1. Set up a bank account for all
your business expenses and
revenues.
2. Set up a cloud based
bookkeeping and accountings
system – Xero, Quick Books –
there are others.
3. Get in the habit of saving
information
4. You are responsible for keeping
records – that’s not an
accountants job
Go to HMRC website – register for webinars – they
are really informative www.hmrc.gov.uk

42. Some advice
Please offer Dawn and David some
advice on their entrepreneurial journey.
How should they market their business?
Should they register for VAT?
What do you think the most difficult
things to manage a food business are?

43. Good Luck!
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Colbea.
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