Start Up Cornwall - April 2018

www.website.com
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• Follow us on Twitter @pkfFrancisClark
• Tweet about this event using:
#StartUpCornwall

4
Start Up Cornwall – why?
• More and more people are starting up businesses
• 589,008 new businesses set up shop in 2017, and the
UK five-year survival rate for businesses born in 2011
and still active in 2016 was 44.1% .By region, the highest
five-year survival rate was in the South West, at 47.0%
• Why Cornwall in particular
• Wealth of business support
• Long standing tradition of SMEs
• Great beaches!

www.website.com
Issues facing start up businesses
• 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

6
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

Warning mechanisms
One minute to go

Funding and support for
start up businesses in Cornwall
• 10 minute presentations on:
• Investment Ready
• Finance support
• Start Up Loans
• Crowdfunding
• Business structures
• Business support
• SME Perspective

9
Andrew James
Investment Ready

Funding options
Equity Debt Grants
Crowdfunding

Selection
• Appropriate
• Tailored
• Competitive

Preparation: General
• Especially important for
start-ups
• The Who, The What, The
Where
• SWOT analysis
• Communicates “business
case”
• Professional
• Tailored
• Realistic
 Supported
• Add up
 Underpin business case
• “Integrated” (Balance
sheet & Cash flow)
 Monthly cash headroom
 Sensitivities
• Licences
• Contracts
• Intellectual property -
ownership?
• Tax – CT, VAT, PAYE/NI
• Statutory + management
accounts & other records
• Cloud Accounting
Business plan Projections “Housekeeping”

Equity
• Growth
• Restricted matters
• No market = “locked in”
Exit route
Funder requirements
• Understand valuation
• Expertise vs independence
• Passive / active
• Potentially more subjective
Preparation

www.website.com
Debt
• Cash flow
• Security
• Covenants – appropriate?
• Govt. initiatives – eligibility
Funder requirements
• Accounts and records
• Projections / affordability
• Credit rating
• Shop around
Preparation

15
Grants
• Eligibility – sector, size, location…
• Impact / project – i.e. usually not
for general expenses
• Ongoing compliance
Funder requirements
• Competition - priorities
• Process – time prescriptive, panels
• Match funding
• Cash flow – arrears
• Admin
• Patience
Preparation
For further information see FiC factsheet

Funded by: Delivered by:
Presented by Heather Coupland
18th April 2018

Overview
Engaged over 550
Businesses
Delivered by
Our support has helped secure over
£3 million for businesses in Cornwall & the IoS
Any Eligible SME
(small/medium enterprise)
looking to access
finance/funding
Fully Funded Support – no fees
Education before Intervention
Post Investment Support

Relationships
Collaborative working with Professional Services
Professional Services Grant
Innovative Crowdfunding/Equity Partnerships
Working closely with Grant Funders
Developing relationships with Alternative Funding Sources
Pipeline for the Financial Instruments Fund (£40M)
Non Executive Director (NED) Grant

Software Solution forTeachers
Tracks Pupil Progress
Start up Loan - agreed
BIG2 Grant - in progress
Crowdcube – in progress

How do we do it?

Sessions

1:1 Meetings

Benefits
Fully Funded Support – no fees to pay
Delivered by Professionals who will explore the
best options for your business needs
Working with you to build the strongest
application possible
Discretionary grants to provide essential Legal and
Accountancy advice

a2fcornwall.co.uk
01872 300 386
info@a2fcornwall.co.uk
Delivered by
Funded by

Mark Thayre
www.swigfinance.co.uk
info@swigfinance.co.uk
01872 223 883

Who are we?
Trustees from Cornwall Council, Cornwall Chamber of
Commerce, Devon County Council, Gloucestershire
First LEP, Barclays and Lloyds banks.
Part of a national network of CDFIs
• Not for profit company
• Established 1989
• Based in Truro

WHAT DO WE DO?
Loans and support to SMEs with potential
but excluded from mainstream finance
• Lack of track record
• Lack of security
• Poor credit rating
• Not within credit policy of lender
• Not investment ready

START UP LOANS
• £500 to £25,000 per business owner for
businesses trading up to 2 years
• Includes purchase of businesses trading
over 2 years
• Fully funded business support
• 6% interest fixed; initial repayment
holidays; repayable up to 5 years

BUSINESS GROWTH LOANS
• £10,000 - £100,000 for growth
investment
• 8 – 12% interest fixed: repayable up to 5
years
• Initial repayment holidays
• No early repayment or late payment
charges

APPLCATION PROCESS
1. Initial enquiry over the phone
2. Complete simple online application
3. Provide information i.e. financials
4. Face-to-face meeting
5. Decision in 1-2 weeks
Application process supported by our local
Business Managers and advisors

Frost Builders (SW) Ltd
The St Agnes-based business, one of
the UK’s leading solar panel cleaning
companies, purchased new specialist
machinery with a growth loan from
SWIG Finance matched with BIG2
grant funding.
Est1985, focussed on high-end bespoke
domestic developments in the Roseland
area.
Finance was requested to help fund the
completion of pipeline orders which
totalled £1.7M.

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

| 34
Get your
idea funded
Phil Geraghty

| 35| 35
Different types of crowdfunding
What is crowdfunding?
Community
shares
RewardsDonations Lending Equity

| 36| 36
Where we fit in
Community
shares
RewardsDonations Lending Equity

| 37
Crowdfunder exists to
tackle society’s challenges
by making ideas happen
Our purpose
| 37

| 38
Numbers
Who are Crowdfunder?
£50,081,812
Total raised through the platform unlocking millions
more from our partners
124,789
Total projects added to date
50,000
Visits daily
200
Projects added daily
#1
Number 1 on Google
Upto
Since our launch in 2013, our funding
has grown >100% each year

| 40
Downloadable guides at crowdfunder.co.uk/guides
Our three steps to success
Getting started
Running your projectPlanning your project Creating your project

| 41| 41
Planning your project

| 42
What makes a good project?
Team Network Story

| 43
Network map
Friends
&
family
Local
people
Press
and
blogs
Anyone
else?
Other
social
media
Existing
supporters
&
customers
Partners
Facebook
Possible
supporters

| 44| 44
Creating a project
on Crowdfunder

| 45
Basic project information
• Title
• Location
• Target
• Contact
Add your project in 6 steps
Creating your project
Learning
resources
available

| 46| 46
Your project description should tell
potential supporters the following:
1. What you want to achieve
2. Who you are and what you do
3. How you will use the funds raised
Your story

| 47| 47
Keep it short & sweet – two minutes
is plenty
Get someone to help you in front of
the camera, faces are powerful.
Write a script. It pays to be prepared.
Video

| 48
Donations and rewards
Every project can receive donations
on Crowdfunder. You can also add up
to 30 rewards to help fund your idea.
Projects don’t have to offer rewards –
but people tend to pledge more for a
reward than they would just donate.
Giving great rewards
Products
& services
Experiences
& events
Corporate
& sponsorships
Thankyou!

| 49
Funding with Crowdfunder
There are two ways of raising funds on Crowdfunder
All or nothing Flexible funding
(keep what you
raise)
Or
Setting your target
Whichever method you choose, hitting your
target and becoming a success is key.
Setting your target is a balancing act
between what is realistic from your crowd
and what is needed to make your project
happen.
Research shows projects using All or nothing are more successful

| 51
Start from the
middle and
work your
way out
Line up the first 10%
Be personal, be direct.

| 52
Keep your supporters motivated
Running your project

| 53| 53
Extra funding & support
through Crowdfunder

| 55
Get in touch
support @crowdfunder.co.uk
Crowdfunder
CrowdfunderUK

An Introduction to Cloud Accounting
Lucy Mace: Cloud Accounting Specialist April 2018

pkf-francisclark.co.uk
We all love the day-to-day running of our businesses but its so easy to neglect
doing our bookkeeping. The main reasons it is so important to keep your records
up to date are:
• Decision making
• Time saving
• Save money
• Legal requirement
• Fines
The Importance of Bookkeeping

What is cloud?
..
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)

And, importantly, why?
• Time saved on your books is time to invest in your self
or your business:
- Automated bank feeds
- Invoice recognition
• Make business decisions based on real time data:
- Dashboards
- Management accounts

The thought of bookkeeping in general may be daunting let alone
setting up a cloud based system, but it doesn’t have to be painful!
• Sign up to some free trials
• Do you need a bookkeeper?
• Get a certified advisor involved, they will be able to help you set
up and get you going in the right direction.
How to get started

Dashboards

Automated
Bank Feed
Match
Discuss
Create
Suggest
Bank rule
Transfer

Making Tax Digital

MTD: Past
• All businesses, including buy to let properties, with a turnover >£10,000
to:
• Maintain their accounting records on digital software,
• Including taking pictures of receipts, and
• Filing of business tax and VAT returns at least quarterly and directly
through software
• From 5 April 2018.
• SCRAPPED 25 April 2017

• With effect from 1 April 2019
• VAT registered businesses with taxable turnover >£85,000 must:
• Maintain their VAT records digitally, and
• File VAT returns directly through software.
• That’s it.
MTD: Present

• No further MTD legislation until at least April 2020.
• Could it be that the original proposals are resurrected?
• Who knows?!
MTD: Future?

What are digital records?
- Basically you must use software that can calculate your VAT but also report the
figures to HMRC directly as the current gateway is being removed.
- You may think that a lot of the desktop packages already do that, and yes you
would be correct, but they connect to the old gateway.
- We have been told that QuickBooks for example, will not be MTD compliant as
they are not developing it any further and it will not be connected to the new
HMRC gateway.
Making Tax Digital

• Cashbook – definitely not
• Excel spreadsheet – you would need a piece of software to connect to the
spreadsheet to then connect to HMRC
• Sage – the desktop version will not be compliant. Sage 50c will be and their cloud
based version SageOne will also
• QuickBooks – they have confirmed their desktop version will not be compliant but
their online version will be
• Xero – if you are already on Xero then you have nothing to worry about!
Will your software be compliant?

Basic tax and business structures
Chris Madeley – Business Services Manager

Basics of tax
• Given we are discussing start-ups I am predominantly talking about Income Tax, and the
different ways you might be taxed when starting a business.
• Income tax = employment income, self-employment, dividends,
• Personal allowance 2018/19 £11,850 – no income tax paid
• Basic rate band 2018/19 £34,500 after personal allowance (20% tax, 7.5% on dividends)
• Higher rate band 2018/19 £100,000 in total (40% tax, 32.5% on dividends)
• Other income levels and unusual tax charges, HICBC, Additional Rate tax

Basics of tax continued
• In addition to income tax there is national insurance
- Class 1 A, employed, 13.8% on anything over £8,424
- Class 4, self employed, 9% on anything over £8,424 profit
• Under employment, tax deducted at source via payroll, if self employed wait until the end of
the year, do a tax return.
• If required to do a tax return, must declare all taxable income, i.e. rental properties, interest
income, dividends, employment, self employment.
• If self employed, remember to save to pay the tax!

Sole Trader – on your own
How it works?
• Quick and easy, bank account, insurance, tell HMRC, do you need any licences to trade?
• Personally liable for debts of business.
• Keep record of all costs even before trading, they can be offset against future profits.
• If you subsequently register for VAT you may be able to recover some of these costs too.
• Prepare accounts once a year, whenever the year finishes the figures for that year go into
the tax year you are currently in. Normally March year end.
• KEY POINT – regardless of what you take from the business to live on, you are taxed on
the total profits.

.
Partnership – 2 or more
How it works?
• Similar to a sole trader, but more than one person
• Shared expertise, often husband and wife,
• Use of 2 sets of tax allowances if partner not employed elsewhere.
• Jointly and severally liable
• Partnership disagreements – get a partnership agreement! This can show how to share
profits, but can provide flexibility in relation to tax.
• Partnerships do not pay tax. Partnership return, work out profit share, and this goes onto
personal tax returns
• LLP?

.
Limited Company
What is it
• A separate legal entity, limited liability, no personal liability.
• Formation – online yourself or a professional such as an accountant or solicitor
• Can provide credibility to business name.
• Many more formalities, wider transparency.
• Accounts on public record within 9 months of year end
• Statement showing directors, shareholders too.
• Payroll scheme, auto enrolment?
• Flexible remuneration – take a salary, reduces corporation tax.
• Taxed at 19% on profits, but any salary taken will reduce profits compared to sole trader.
• Incorporation (sole trader first?)

.
Most effective business structure
• Initially a sole trader is usually the right approach but weigh it up
• As profits grow potentially worth considering other options.
• If you are paying higher rate tax each year, but do not need higher rate income to live on,
then incorporation may be a good idea.
• Process of incorporation costs money, but goodwill can mean you can extract funds in year
of incorporation tax free, or at efficient rate.
Quick example:
Husband and Wife can both take efficient salaries (£8,424 per year), charge the company
interest (potentially £5,000 per year) and take tax free dividends (2,000 per year) providing
extraction of over £30,000 without a tax liability.
The profit in the company is taxed at 19% - but is reduced compared to a sole trader profit by
the salary and interest taken by the directors.
Company offers flexibility, if you are making profits and not needing to extract them all then
there is a tax saving to be made, but shouldn’t make decision solely based on tax.

78
Outset Cornwall
Ian Williams
Client Engagement Manager

79
Outset Cornwall
Consortium of partners:-
- Outset Cornwall
- YTKO
- Spark
- Truro & Penwith College
- Business Enterprise for Women (BEW)
- Truro & Penwith College
- The Engine Room
- Cornwall Neighbourhood for Change
- Real Ideas Organisation
- School for Social Entrepreneurs Cornwall

80
Outset Cornwall
• European Regional Development Funded
Programme
• Covers Cornwall and the Isles of Scilly
• Start their own business or register self-employed

81
Outset Cornwall
• Information Sessions
• Workshops
• One to one coaching
• Monthly Networking
• Outset Online

82
Outset Cornwall
• Start Your Business
Transferrable Skills
Customer Profile
Market Research
Profit & Loss
Costing & Pricing
Cash Flow Forecasting

83
Outset Cornwall
• Run and Grow your Business
Business Structures & how to register with HMRC
Business Planning & Finance
Branding & Promotion
Creating a Wordpress website
Digital Marketing
Social Media
Search Engine Optimisation
Creating a Mindset for Success

84
Outset Cornwall
• Further Support
Marketing Opportunities
- magazines, newspapers, cinema and radio
Trade Events & Shows
- Business Show, Business Fair, Summer Fest
Assist with applications to Start up Loans

85
Outset Cornwall
Contact us at:-
Outset Cornwall
01209 311063
info@outsetcornwall.co.uk
www.outsetcornwall.co.uk

Jamie Smith- Unlocking Potential

Programme overview
Fully funded by ERDF
Help start up businesses
succeed and grow
Available to start-ups in
Cornwall and IoS

Initial engagement:
2 day start-up workshop
Introduction to key elements:
Building a business plan
Branding
Finance
Work with coaches
Challenge thinking
Test viability
Assess ambition / potential

“The workshop was amazing and gave plenty of new ideas
and directions to work in.
To be around other people who’ve also had the vision,
drive and courage to strike out and do their own thing
makes the workshops one of the best environments for
bouncing ideas around, hearing other success stories and
really enthusing you that, yes, it can be done!”
Kernow Kampers

Post-workshop support
Level of support offered dependent
on growth ambition
Initial growth businesses work with
UP Business Development Managers
High-growth businesses offered
one-to-one coaching from OI
Recruitment support available

Initial growth
businesses
Micro or self-employed
Assigned a Business
Development Manager
Offered focussed workshops
Recruitment support available

High growth businesses
Assigned a lead business
coach for one-to-one coaching
Additional coaches with
relevant specialisms available
as and when required
Tailored approach to ensure
best support for client
Link into Access to Finance

How Breakthrough can help
Refine and test the business model
Branding, sales and marketing strategies
Identifying new channels and markets
Developing new products and services
Sourcing and supply chain
Developing a team, including graduate recruitment service
Management capability development
Extending geographical reach

“The best bit is the flexibility – you’ve got your
lead coach but they can bring in people with
particular expertise.
One of the things we’ve experienced is having
complicated conversations with other
organisations around partnerships and
potentially acquisition.
As a start-up company, dealing with what feels
slightly like sharks, I needed some expertise so
they were able to provide me with some
specific coaching in this area.”
Dr Paul Upton, Ultramed

Who is eligible?
Businesses must:
Have been trading for less than 12 months;
Be based (or going to be based) in Cornwall or the
Isles of Scilly; and
Fall under a sector considered eligible under ERDF

Routes into the Breakthrough programme
Referral via Growth Hub
ciosgrowthhub.com
Apply via the Breakthrough website
Breakthroughcornwall.co.uk

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 Lifeboat patrol – be a
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 Lifeboat experiences
 Odyssey wildlife
adventures
 Odyssey adrenaline
 Extreme coasteering
 Dive odyssey
 Team building & private
charter

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

Thank you to….
And more, including our SME Perspective presenter

(c) copyright PKF Francis Clark, 2018
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Start Up Cornwall - April 2018

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