When you start a business you are entering an unfamiliar world so here we provide information on what you should do and what is available to you. Whichever sector you are in getting the essentials right from the outset is the only way to start.
A Business Plan is a document that lays out in simple terms what your business is, its objectives, plans and resources. They are primarily used when raising finance and as a means of measuring performance.
There should be an executive summary at the start of the document which outlines opportunities and defines strategies along with financial predictions and an overview of the business and its operations. It should explain who you are, what the business will do now and how it will develop in the future.
Strategies should focus on marketing and sales and highlight which channels you will be promoting your business through, how you will achieve sales and your pricing policy.
Operations should discuss where your business will be working from and your proposed systems for IT and managing information.
The financial forecast should include cash flow statements, profit and loss and sales forecasts. List any security you can offer and how the business will be able to repay any borrowings.
Growing Your Business
With many businesses struggling and worse it should be remembered that many businesses are still bucking the trend and growing. Why is this. They might be in a growth market, they might be lucky or they could well just be running an efficient well managed business.
So, what is the key to business growth? For one it’s staying on top of the numbers; understanding your financials, margins, profitability, sales, marketing funnel and cash flow. It’s by delighting your customers or at the very least meeting their expectations and requirements (so you keep them!). Thirdly it’s about creating a clear direction, goal setting and planning and measuring and of course understanding your marketplace and competition. This is vital yet only a small proportion of businesses in the UK do this. And finally, it’s about seeking external help and support – gaining knowledge, a mentor or business coach is ideal as they help you navigate your business through the ups and downs of running a business and make you accountable ensuring set goals and targets are met in the agreed timescales.
Do all of this and you are mitigating the risk of failure, creating a business that will operate efficiently and beat the competition.
Many people think business plans (1,3 or 5-year commonly) are just for start-up’s, or to seek investment whether that be loans or investors. The truth is that business planning offers many benefits for every business.
A living, breathing business plan helps you grow. According to a survey conducted by the Kauffman Center for Entrepreneurial Leadership companies with a written business plan have 50% greater sales growth and 12% higher gross profit margins than those without one.
It should be pointed out what is meant by a living breathing plan. It’s a plan that is live and you can adapt, update and add in ‘what if’ scenario’s, i.e., it’s a useful flexible tool that will help your business. After all there is no point in having a plan where you can’t revise and add in the monthly revenue, sales figures and other key information to see whether you are on, above or below your projected (planned) targets. Any of these figures will have a bearing on how well your plan is being implemented.
So, what are the top ten Business Plan benefits of having such a plan?
1. Priorities will be clearer. Business planning should connect the dots in your business, so you get a better picture of where you are and what you want or need to do. Strategy is supposed to relate to tactics with strategic alignment. Does that show up in your plan? Do your sales connect to your sales and marketing expenses? Are your products right for your target market? Are you covering costs including long-term fixed costs, product development, and working capital needs as well? Take a step back and look at the larger picture.
2. Strategic Focus. Start-up’s and businesses of all sizes need to focus on their special USP’s (Unique Selling Points), their target markets, and their products or services tailored to match.
3. Set priorities. You can’t do everything. Business planning helps you keep track of the right things and focus on the most important things. Allocate your time, effort, and resources to those tasks that are going to grow your business and make it a success.
4. Manage change. With a good planning process, you should regularly review assumptions, track progress, and manage new developments so you can adjust as time progresses. This will also help you avoid costly mistakes. This is especially important in these turbulent times.
5. Metrics. Put your performance indicators and numbers into the business plan where you can see them. Use your business planning tool to define and track the key metrics.
6. Develop accountability. By having a planning process and tracking results you can review regularly – spot the good and bad (plan vs. actual) and adjust either yourself or by delegating.
7. Manage cash flow. Poor cash flow is nine times out of ten why businesses fail. Mitigate problems and adjust; profitability, products, purchasing assets, repaying debts, bad debtors, overstocking… to name a few.
8. Strategic alignment. Make sure your day-to-day work fits in with your business tactics which in turn matches the strategy. Alignment equals greater success.
9. Milestones. Good business planning sets milestones (goals) you can work towards. These are key goals you want to achieve, like reaching sales targets, hiring staff, or opening a new location.
10. Ensure your success. A business plan will undoubtably clarify your strategy and goals but the key to success is using your plan within your business on a constant basis building it in to your day-to-day activities and updating it as time progresses.
If not managed correctly your business will experience cash flow shortages which hinder growth or place your business at greater financial risk as the percentages in these areas grow disproportionally to your revenue. The challenges for you and your team is to continually catch this disproportion before it becomes a problem.
The maintenance of positive cash flow and the management of the cash collection function are fundamental to the success of any company. especially during the Covid-19 crisis as historically nine out ten business fail due to poor cashflow.
A good strategy to manage cash flow is concentrating more on what they refer to as ‘A’ Class clients – i.e. your largest ones. This strategy alone should result in improved cash flows and working capital for the company for the following reasons:
• Larger clients should be more creditworthy
• Payments from larger companies tend to be easier to predict due to their higher reliance on systemised payments (as opposed to ad hoc payment from small businesses)
• Larger clients and higher fees will result with less work being required to collect the same amount of cash
• Fewer and larger clients will enable better credit control
Other strategies could be:
To monitor and assess the gap between conflicting items e.g., Revenue to Growth Profit percentages; Revenue to Net Profit percentages; Marginal Cash Flow percentage change; Operating Cash Flow percentage change; and Net Cash Flow percentage change.
To project the future growth of your business using robust business modelling tools and running a number of what if scenarios.
Once this has been done, you can then adjust the parameters to produce revenue growth with an alignment in gross profits, net profits, working capital and business value increase. Build in key financial indicators for your business to follow as your business grows.
Monitor regularly. Once a what if model has been agreed to e.g., the level of desired growth is set, profit is assured, cash flow aligned, and your business’s value is increasing you then move forward with growth plans and monitor your business financial performance monthly, quarterly, six monthly and annually. We do this monitoring to make sure your ’now in place’ financial budgets to the actual monthly results are within desired levels.
Monthly budget to actual is the regular monitoring process and is great to keep things on track but it’s simply not enough. Annual planning with financial modelling gives an ability to assess exponential growth via methods outside of simply selling more products or services.Read the full article
You’ll be working for yourself and will be solely responsible for everything.
You’ll be working with one or more others to share decisions and any profits. We highly recommend putting a partnership agreement in place because circumstances can change. A template is free to download in the members’ area.
A limited company is a legal entity in its own right and is run by its directors on behalf of its shareholders who have a financial stake in the company. Template documents are available in the members’ area.
Limited Liability Partnership
Similar to a limited company in that it has its own legal identity. It is run by its members and, again, we recommend appropriate documentation be put in place.
What is it?
MLM meaning Multi-Level Marketing is where individuals seek to grow their sales base by word of mouth and direct recommendations! The majority of them are privately run companies (i.e no shareholders and everyone involved can earn the right to year end bonuses) and a small number of them are listed on the stock exchange where dividends are paid to the shareholders.
Multi- level comes into play when some of the customers who buy regularly see the advantage of registering with the company direct so that they can receive a hefty discount on their recurring purchases and so on and so forth – this then provides the “multi-level” effect.
Notice I hesitate to use the word “selling” and this is because even though people are happy to purchase MLM products when approached about considering it as a business under the umbrella of the MLM company the first question they ask is – “Is it selling?” In the majority of cases these people are usually already in business. No one seems to like the word “selling” despite this being key in any business structure. So please note that it doesn’t matter if you are selling a service or a product or indeed yourself at an interview without sales there is no business and/or income.
Are MLMs Pyramid Schemes?
This is a popular question that is asked a lot so let’s get this straight from the getgo…
It’s pretty simple really, Pyramid schemes do not involve an actual product or service and are illegal.
MLMs have a product or service to sell directly to the consumer and are governed legally by each country’s Direct Selling laws – in the UK this is the DSA (Direct Selling Association).
Isn’t it only the people at the top who make the money?
This is true of any business and MLM is no different. I often ask people where they are on their current pyramid i.e who their boss is or if they haven’t a boss because they are self employed or owner director then they are at the top of their own pyramid!
Network marketing and MLM – what’s the difference?
Absolutely no difference – as in any business you are simply growing your network and educating them about what it is that you do. MLM is no different.
What is the value of MLMs?
Globally the value of MLM sales was £184b in 2015 rising to £192b in 2018 and hit £200bn by the end of 2020. When you consider this against (say) Google at £182bn or Microsoft “122bn in 2020 then you can safely say that MLM is quite significant and is set to grow exponentially over the next 10years.
Can you make money with MLMs?
Yes is the straight answer however it all depends on how much money you want to make.
It is widely known that the vast majority of people in MLMs make only a few hundred pounds per month. The reason for this is that the majority of these are glorified customers purchasing for their family and friends at discount. For some this extra “few hundred” pounds a month is all they need to provide the luxuries in life and in reality, this takes up very little time and therefore a very attractive option instead of a promotion at work where you would be expected to take on much more responsibility for a small increase.
There is then the next group of MLM-ers who earn on average £800-£1200 per month – this does take more time and patience and when this position is reached you are more likely to go on to achieve greater things as the good habits have been instilled and you can see a clearer way forward. The majority of people still do this alongside a fulltime job and probably requires around 10hrs per week.
Why Choose MLM?
I am often asked why someone would choose MLM over a traditional business model and this year in particular has helped to explain why I believe that MLM is the business model of the 21st Century and has the support of some big names in business such as Richard Branson, Bill Gates and
1. Vey little risk involved. In UK this is capped at £199.99 to get started.
2. The most reputable companies will offer quality training and personal development for free
3. Huge demand for good quality, eco friendly traceable products that most MLMs offer
4. Opportunity to create a residual income
5. There is no cap on the income you can earn
6. It is a willable income unlike a number of traditional income streams/pension
7. There are no “employees”
8. No inventory
9. Low operating costs
10. Portable business allowing you to literally work from anywhere online/offline or both.
Is MLM for you ?
It will be if you meet the criteria below:
1. You treat it like a business
2. You are willing to learn a few simple skills and apply them in practice
3. You are ambitious
4. You are self motivated
5. You are Consistent
6. Positive and happy disposition
7. You know exactly what you are after – ie goals are really clear
8. If the 9-5 depresses you
9. You’re a happy person and really enjoy life!
So you have created your business and know you need an online presence to help support and grow your business. How do you get started, what do you need to make the process as smooth, secure and professional as possible?
There are three fundamental things you require to achieve your goal of having an online presence:
– A domain name
– A hosting package
– A website
The first and most important thing to say about domain names is that it is crucial that you purchase your own domain name. Do not let anybody else purchase it on your behalf no matter how easy it is to do or how simple it makes the whole process. Anybody who owns a domain has the ability to sell it, close any website on the domain down or redirect the domain to another website. Letting somebody else purchase your domain is similar to giving that person the keys to your office or the password to your office PC.
What do you do if you are already in this position? Well the best solution is to visit the following website, https://who.is/ . Type in your domain name and search for the results. In the results section, look for the details of the registrar. This is the business where your domain has been purchased. Go to that registrar’s website and create your own account with them and then contact the person who bought the domain name for you and ask them to transfer the domain to your account. It is easiest and quickest if you have an account with the registrar, as this makes the transfer an internal one which is simpler to process.
Here are some other things you should consider when purchasing your domain name:
1. The Actual Name – Ideally your domain name will include your business name and maybe even a keyword that relates to your business. Try and think how you will tell people what your domain is and make sure it is easy to say and more importantly understand if you hear it. A domain name that you have to either spell or explain is not ideal. Likewise look at any domain name you are interested in and see if the letter configuration looks understandable and doesn’t combine letters that look odd or confusing. If words in your domain name end with the same letter as the next word starts can look a bit odd when displayed. Try and avoid using hyphens in the domain name as well as this will become a bit of a mouthful when you are trying to tell people what your domain name is.
2. The TLD (Top Level Domain) – For most businesses in the UK, the .co.uk TLD will be the most useful, relevant and popular. The explosion of websites though has led to there being lots of new TLD being made available and some of these may be appealing to you, and might make some sense in having. Likewise, if your business is International, then .com TLD may be of interest. It is worth exploring each of the TLDs to see if there are live websites on them. If you purchase the .co.uk TLD of a domain and there is a competitive live website on the .com TLD, this may cause you problems later in your business life. It is worth mentioning at this stage that you can have multiple TLDs for your domain name and have them all point to your website, this means that no matter which TLD (that you own) any visitor of your uses, they will be directed to your website.
3. Registrars – There are several different registrars you can buy domains from. I won’t list any here as they are all findable by searching in Google. It is worth making you aware that domain name prices are initially fixed by a regulatory body called ICANN, but after that, prices can vary and registrars offer sales and discounts at various times. Once you decide on the domain name(s) you want, you will be given a choice as to how long you want to purchase the domain name for. Minimum contract for a .co.uk domain is 1 year but most deals are based upon a 2 year deal. You can however purchase a .co.uk for up to 10 years before needing to renew it. There is no practical benefit in buying for a longer or shorter period, but what is sensible is to make sure the domain names you purchase are set to auto-renew. This means you don’t have to worry about ever losing your domain by forgetting to renew it.
Most domain registrars will offer you a hosting package when you purchase your domain(s). They make it very easy to put these two items together, but you don’t have to take this option, and in some cases, you would be wiser to avoid this choice. There are two basic types of hosting package.
1. Shared Hosting – This is the cheapest of hosting packages and means that your website will be located on a server that is shared with a number of other websites. The benefits of this option are that it is cheap and easy solution and suitable for many basic websites. The downside is that your website is a bedfellow with a range of other websites that you have no control or knowledge of, and it is possible that your website will not load as quickly as it would if it was on a VPS hosting package.
2. VPS Hosting – Most hosting companies offer one super sized server that they have divided up into standard servers of their own. If you purchase a VPS hosting package, you will have your own partition of this super sized server and no other website will have access to your partition. This is the middle ground when it comes to pricing, but does offer you more control, security and probably speed that your website can use. This account will be perfect for larger websites and maybe ecommerce website with a large number of products. You can also put more than one of your websites on this type of hosting package if you had them.
3. Dedicated Server – The highest cost of the three options and this is exactly what the name implies. You have your own physical machine within the hosting company you are using. No other client will have access to the server and you can use it for as many of your websites as you wish.
As with domains, every hosting company has different price ranges and will also offer various add-ons that will increase the prices. It will be wise to speak with your chosen web designer who will be able to advise you and assist you with the decisions you need to make with regards to hosting.
If you are reading this guide, then this is the part you are probably going to be most interested in. Website design has moved forward in significant leaps and bounds in terms of ease of creation and availability. It is highly likely that the website you end up with for your business will be created using a CMS (Content Management System) software. The most popular of these CMS systems by a significant margin is WordPress. However, you could consider Joomla, Bootstrap and Magento to name another three. All have their pros and cons, but for the purpose of this guide, I am going to focus on WordPress websites.
View WordPress as the skeleton for your website. It is the guts of the website, doing all of the complicated actions to make sure your website is displayed when your domain name is typed into a browser. WordPress is open-source which means it is free of charge and you should never entertain a web designer who wants to charge you for using this CMS package. Being open-source, WordPress has attracted numerous technical people who have created themes and plugins for WordPress that make it prettier to use and more effective for any visitors. View the themes as the skin of your skeleton and the plugins the clothing you would wear to make your website more appealing.
1. Themes – There are three types of theme that you could consider.
a. Free Themes – Search the term “Free WordPress Theme” and you will be inundated in options. The reality is that you should avoid free themes for many reasons. Firstly, being free doesn’t mean better. The coding may not be written as fluently as it should be, the theme may not be supported for any future updates of WordPress which means your site could break when you next update WordPress. Secondly, some more unscrupulous individuals will insert malicious code into a free theme that can compromise your site and give you significant issues. Finally, the chance that a free theme will meet your exact requirements for your website is slim and changing it to accommodate your requirements may be difficult.
b. Premium Themes – If “Free WordPress Theme” gave you plenty of options when searched, then “Premium WordPress Theme” will also give you plenty of choice. The fundamental problem with a premium theme is that the creator will have tried to make his theme appeal to as many different types of business as possible. This means that the theme could be full of excess items that are not going to be required by your website. An accomplished web designer will be able to remove some of this excess, but it is possible that not all can even be removed. The other issue with a theme of any type is that unless you purchase exclusivity for a theme, then you can be sure that you will find other websites that look familiar to yours. Many web designers claim they are designers, but just use a premium theme and then tweak them as requested. This solution is fine but you may have issues if you ask for certain changes to be made that may not be possible within the premium theme that you have chosen.
c. “Blank Sheet” Themes – There are a couple of themes that are considered as being blank sheets. In other words the design is built from the ground up. Each aspect of the design is built to your exact requirements. You get the best of both worlds with this type of theme in that you can have your designer use a premium theme as a guide, but have control over every aspect of the overall layout.
2. Plugins – If the theme you choose sets the layout of the site, then the plugins will give your website some background and some foreground benefits and interaction capabilities. It is worth remembering though that the more plugins you have installed, the more work your hosting package has to do to run them and this may potentially lead to a slower loading time for your website. Your web designer should be able to advise you as to which plugins are indispensable, which are helpful and which should be avoided.
What to ask your Web Designer
There are several questions that you need to get acceptable answers to from any web designer you are considering to work with.
- Can you show me some examples of the websites you have created?
- Can you supply me with some references from your current client base?
- What CMS package do you primarily use to create websites?
- Do you use premium themes or do you create a theme from scratch?
- Will my website be responsive (mobile friendly)?
- What type of hosting do you suggest my site will require?
- What other services will be included in the creation of my website?
- Will it be optimised for my keywords?
- Will it be optimised for speed of page loading?
- Will it be secured to maximise my protection from hackers?
I hope this guide has helped clear the confusion and fog around some of the issues you will face when getting a website for your business.Read the full article
As a newly self employed person, partner or owner of a newly formed limited company you very quickly find yourself on all sorts of mailing lists offering you solutions, products and services. If you use social media for your business your feeds will start to fill up with similar offers.
Some of these offers will be genuine but others will be targeting your vulnerability as someone new to running a business. Scammers are well aware of this vulnerability and it is important to identify ways of knowing what is real and what is a scam.
Joining YBC gives you full access to all of the Business Academy articles, unlimited free advice and the opportunity to attend our regular networking events.
It is well documented that around half of ‘one person businesses’ don’t earn the basic wage so scammers often position their offerings to offer you the magic bullet to set you on the road to riches.
Make no mistake, established business owners can be caught out too. There’s always something new you’ll be offered and it’s always best to check with others before agreeing to anything that looks too good.
You’ll also become the prey of big companies trying to sell you their wares. Be prepared for banks, accountancy software providers and others telling you how to run a business. It’s a sad fact that the writers of these message are very likely to be employees so have no idea what it’s like to be in your shoes.
Longer standing business owners know that the best way to counter this vulnerability is to surround yourself with a network of trusted advisers. Your membership with YBC offers you unlimited free advice and you also have the opportunity to attend our networking events where you can meet others in similar situations to you but from a wide variety of business disciplines. Sharing knowledge with one another is powerful!Read the full article
Are you looking to raise finance to start or grow your business?
Join the tens of thousands of Start-Up Loan recipients and realise your business dream.
The Government-backed Start-Up Loans Company provide funding and free mentoring support to help start or grow your business. It offers personal loans for business purposes up to the value of £25,000.
This scheme has provided startups with literally hundreds of millions of pounds since its inception and is available at a very attractive interest rate.
To be eligible you’ll need to have started your business within the past 2 years.
You can access the application form via this link:
You will need to provide a business plan to support your application, and if you need any help in this respect, please let us know.Read the full article
Forming a limited company limits your liability. This means that only the company itself is liable for any obligations and debts accrued.
Limited companies, generally speaking, have more credibility and are easier to sell.
There are 4 distinct parts to a company:
– Firstly the company which is a legal entity in its own right.
– The Directors who are responsible for the running of the business.
– The Shareholders who own shares in the company.
– The employees who work for the company.
Of course in practical terms you can be a director, shareholder and employee. All of these perform separate functions though.
Any property bought by the company is owned by the company and not by its directors or shareholders.
In terms of definition the directors run the company on behalf of the shareholders and ultimately can be removed by them. Shareholders own shares in the company but don’t run it.