The New Bank Referral Scheme

News from the KPMG business advice website: http://businessadvice.co.uk/finance/get-funded/heres-how-the-new-bank-referral-scheme-actually-works/

A new government initiative will join up small business owners who have struggled to access finance from traditional banks with alternative funding providers.

Here’s how the new bank referral scheme actually works:
The bank referral scheme is “an important milestone” in the government’s approach to small business finance.  Small business owners who are finding it difficult to obtain finance from major high street banks will from today be paired up with alternative funding options, under a new government initiative.

From 1 November 2016, the Treasury’s bank referral scheme commits nine of the UK’s largest lenders to passing on the details of small firms that have been rejected for finance to three platforms – Funding Xchange, Business Finance Compared and Funding Options.
These platforms will then share details with other alternative finance providers, facilitating a conversation between the small business and any provider expressing an interest in supplying it with finance.

The nine banks involved are RBS, Lloyds, HSBC, Barclays, Santander, Clydesdale and Yorkshire Bank, Bank of Ireland, Danske Bank and First Trust. Small business owners will need to give their permission before their bank can share their details.

Speaking exclusively to Business Advice, Alice Hu Wagner, strategic director at the British Business Bank (BBB), which supported the Treasury in establishing the referral scheme, said the initiative represented an important milestone in the government’s approach to small business finance.

“The bank referral scheme acknowledges that the problem in Britain isn’t with supply [of access to finance] it’s with transparency,” added Hu Wagner. “What’s holding back growth is that small business owners don’t know where to access finance if bank’s turn them down.”

Research from the Treasury has shown that 71 per cent of businesses seeking finance only ask one lender, with many choosing to give up on their planned investment once rejected.
Of the 324,000 UK SME owners that sought a loan or overdraft in 2015, 26 per cent were rejected outright by their bank, with only three per cent of these referred to alternative funding sources.

“This will make shopping around for funding a lot easier,” explained Hu Wagner. “At the moment, you have to apply to every lender individually, with the hope that one will be accepted.  “The new rules will see small businesses only having to hand over information once, to receive a quote via any platform once referred by its bank.”

Hu Wagner confirmed that the scheme would see banks enter into a legally binding commitment to best serve the interests of SMEs that apply for finance.  The bank referral scheme will be free for any UK-based business with less than £25m turnover, applying for funding from one of the nine participating banks.  The initiative has been hailed by small business bodies as one that can transform the UK economy long-term, with the idea being that more and more alternative finance platforms will join the referral scheme as it gathers pace.

Chairman of the Alternative Business Funding Portal (ABF), Adam Tavener, said: “Post-Brexit the importance of SME health to the UK economy has never been greater.
“A lot of work has been put into this new initiative to open up a range of alternative funding providers to SMEs looking beyond their existing bank for financial support”.
The Federation of Small Businesses (FSB), another organisation that worked closely with the government while developing the bank referral scheme, has welcomed the added choice of finance options and greater competition the scheme is likely to bring to the banking market.

FSB national chairman Mike Cherry said in a statement: “Small firms struggling to access finance will now automatically have a new way to get the support they need to invest and grow.  Hu Wagner continued by telling Business Advice that another important part of the government initiative was to offer further education to small businesses about the growing range of alternative funding options available.

The BBB’s business finance guide, published to coincide with the launch of the referral scheme, aims to increase awareness of alternative finance amongst small companies across the UK.
Acknowledgement to KPMG for content.

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Starting a business from home

13-newsIt’s simple to start a business from home and growing numbers of people are doing it. There are 2.9m home-based businesses in the UK and they contribute £300 billion to the economy.  As part of its long-term economic plan to back businesses, the government has made it even easier to start a business from home.

Here are some ideas you need think about when starting a home based business.

The Home Business Guide explains the process of setting up a business from home and dispels common myths. It covers business essentials like rates, insurance and health and safety considerations. You will also need to consider wether planning permission is required to run a business from home. The local planning authority will determine this on the individual merits of a case.  Check if your home business will be subject to business rates. Generally, you shouldn’t have to pay business rates for minor business use of the home.

The Health and Safety Executive’s homeworking guide will help you to check that your home business meets health and safety requirements.  Home business must still decide on the legal structure of your business. Sole traders, business partnerships and individual partners must register for self-assessment with HM Revenue and Customs (HMRC).  Private limited companies and Limited Liability Partnership (LLPs) must register with Companies House.

You should let your landlord know that you are planning to run a business from home and get their consent before doing so. The government has confirmed that social tenants are able to start and run a business from home. If you own a leasehold property you should check your lease for any restrictions.

Taken from: http://www.greatbusiness.gov.uk/where-to-get-start-up-advice/

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So where do you get start up advice?

So you’re ready to start a business. The UK has a very supportive environment for startups, with a flourishing wealth of networks, groups and organisations for all types and style of new business, where you can get practical advice, ideas and make many valuable contacts.  Take good advice at this planning stage, and you may well avoid costly mistakes later on. A business mentor can give you honest and constructive feedback, as well as provide useful contacts and pass on valuable experience. There are mentorship programmes to suit all kinds of businesses, including startups.

All CMB mentors are fully trained – get in touch to see where we can help.

http://www.thecentreformicrobusiness.co.uk/westkentprogram/

There is a wide array of services across England, offered by National Enterprise Network, New Entrepreneurs Foundation, School for Startups, Women in enterprise, and Enterprise Nation to name a few.

You can get help with advice and support if you’re out of work from the New Enterprise Allowance, which can provide advice, mentoring support and financial help.

There are several membership organisations which represents and helps owners and directors of small and growing businesses, like Federation of Small Business, British Chambers of Commerce, Institute of Directors and the ICAEW Business Advice Service.

Taken from: http://www.greatbusiness.gov.uk/where-to-get-start-up-advice/

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Financing a new businesses

A bank loan is not the only way that you can raise money to fund your startup business. For some businesses, particularly new riskier ventures, equity investment – raising capital through the sale of shares in a business – may be most suitable. For equity finance, there is a growing number of business angels prepared to back new businesses. The government provides generous tax relief to investors who want to support new businesses.

For less risky types of businesses, debt finance may be more appropriate. If you are struggling to obtain a loan to start a new business, you may wish to consider applying for a start-up loan. For alternatives to the high street banks for both equity and debt finance you could consider raising funding through alternative finance providers such as peer-to-peer lenders or crowd funding platforms.  Find out more by getting in contact.

http://www.thecentreformicrobusiness.co.uk/finding-your-funding/

Taken from: http://www.greatbusiness.gov.uk/where-to-get-start-up-advice/

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Writing a Business Plan

Writing a business plan is a vital first step when starting a business, in order to set out your proposition, your market, customers and competitors.  The business planning process will give you a feel for the various elements that will determine your success, from cash flow, to sales forecasting to your personnel structure. A good business plan will let you structure your finances efficiently, show potential investors the strength of your business, and focus your efforts on developing your business. A business plan isn’t written once; it’s a living document that you return to periodically to help you spot potential pitfalls before they happen.  Find out more by getting in contact.

http://www.thecentreformicrobusiness.co.uk/events/

You can get plenty of free advice and guidance on how to write a business plan on line:

Sample business plans and guides from Barclays, Lloyds, HSBC, RBS and NatWest banks.

Business plan advice and guides can be found from ICAEW, CIMA, and The Association of Chartered Certified Accountants.

You can get help with a business plan if you’re out of work from the New Enterprise Allowance, which offers support with developing your business plan, as well as financial and mentoring help.

Taken from: http://www.greatbusiness.gov.uk/writing-a-business-plan/

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The Challenges Facing Small Business

5 Biggest Challenges Facing Small Business (Plus Solutions!)

Ask any small business owner and they’ll tell you: running a small business is anything but small. It takes dedication and lots of hard work to get off the ground, but creating your own profitable business can be beyond rewarding. To get from ‘small business’ to ‘large company’ status however, you’ll have to face some growing pains. If you’re a smallbiz owner or are thinking of starting soon, you’ll want to plan for some of the potential obstacles ahead.

Here are some of the biggest challenges you’ll face, and how you can conquer them:

5 Biggest Challenges Facing Small Business

Little To No Online Presence

There’s no denying it: people are turning to the web for just about everything. If your business doesn’t have a professional online presence, you’re already a step behind. Luckily, putting your business online isn’t the complicated and costly endeavor it once was.

Here is a checklist of essential elements for a successful online presence.

The solutions:

Get yourself a professional website. Be sure to optimize your website for mobile and beef up its SEO. This way, no matter what device people are on, they’ll be able to find you.

Determine which social networks your target audience frequents, and set up a professional account on them. Creating and maintaining a social presence is key to helping drive traffic to your website, and grow your business.

Conquer email marketing.

Little To No Online Presence

Lack of Marketing Knowledge

When you start your own business, you don’t get a handbook explaining the ins and outs of marketing. While there are plenty of resources to help small businesses learn these skills, it’s hard to find the time to filter through with an already jam-packed schedule from running your own biz. Even though you may be spinning multiple plates at once, marketing should be prioritized. Getting the word out about your business is crucial to its success – so don’t skimp here.

The solutions:

Subscribe to a trustworthy blog that provides detailed information and actionable tips on all things marketing for small business. 

Once you’ve done your research, put this new knowledge into action. Create a marketing plan that includes your target audience, measured goals, known competitors and initial advertising platforms.

Hire a marketing company to handle your workflow. If you really don’t have the time to market your business, it’s likely worth the investment to make sure someone else is marketing it for you. Do your research and find an agency that will fit your budget, understand your brand, and be motivated to help you achieve your goals.

Trying to Do It All Alone

This is a common trap that many self-starters fall into. While you may be able to maintain an insane work flow for a while, eventually your knees will start to buckle and your business will suffer. It can be hard to hand over the reigns to someone else, or to trust a new hire with important tasks, but as you grow it will become necessary. The money you spend on salary will almost certainly equal what you’d lose if you go at it alone.

The solutions:

While sometimes you may think you know best (and sometimes you’re right), don’t shy away from advice. Learning from others and their mistakes is a great way to make up for any lack of experience. And remember, just because someone gives you advice, doesn’t mean you have to use it.

Build a dream team. If you’re desperate to hire staff, you’ve likely already started too late. When growing your business, the people you choose to work with can make all the difference, so be sure to bring on talented people who will be a good fit for your work environment.

Getting (and Keeping) New Clients

Getting new customers is obviously good for any business, but what really makes things take off is having repeat customers. In fact, a repeat customer is likely to spend 67% more than a first time buyer. So how do you make it happen? Like so:

The solutions:

Price your products and services competitively. Doing your market research will give you an idea of what you should be charging. Use this information to price your products and services competitively and gain an attractive advantage.

Follow through with remarkable service. Even if you have an amazing product line, nothing beats top tier service with a smile. Warm professionalism and reliability go a long way, and should be worked into your brand’s values. And of course, leave the 10 things clients hate hearing most out of your vocabulary.

Follow up with your customers and encourage them to come back with incentives like special discounts and even memberships.

Balancing Quality and Growth

Congrats! Your business is succeeding and it’s growing every day. Now it’s important to put parameters in place that will help you scale to meet demand while maintaining a high level of quality.

The solutions:

Develop a company culture that values quality just as much as you do. Prioritizing this value in your training and team building will allow your company to grow as a unified brand that you can be proud of.

Do your best not to micromanage. If you have competent and trustworthy staff, you should be able to delegate tasks and projects to them while keeping a watchful eye. This will allow you to focus on important tasks of your own, like growing your product line or expanding into a new market.

Be an all-star team leader. Your staff will do their best work when you help make their job as easy as possible. This isn’t to say you should encourage 3 hour lunch breaks, but you should be creating a workflow that lets your employees perform at their best, and not be bogged down by unnecessary tasks.

Taken from:
August 4th 2015 | Small Business Tips

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Ways to Market your Micro Business

Small businesses usually can’t afford the high marketing budgets that large companies take for granted.  Micro businesses must be creative and determined to achieve their marketing aims. Here at the Centre for Micro Business we know how to achieve this.  We can help with:  website, branding, words and pictures, video and much more.

To Help Small Business Tips published this on 6th July 2015

Once you have read though why not contact us to see how we can help.

Here we go!

24 Effective Ways to Get Free Marketing For Your Small Business

1. Create a powerful business website:

Your site is the touchstone of your online presence.

2. Submit your website’s URL to search engines:

Google and Bing both offer the option to submit links to their platform and speed up the indexing process. This will help you improve SEO and rank better on search engine results.

3. Give a talk in a professional conference:

Presenting your vision or sharing your expertise with a live audience is a superb way to find your way to the spotlight.

4. Ask happy clients to share their experience on their social channels:

What satisfied clients say about you will always sound far more convincing than what you say about yourself.

5. Set up a newsletter and grow your subscribers’ base:

Email marketing is a highly effective way to interact with potential and existing clients.

6. Optimise your elevator pitch:

Do you know how to sell your brand in a short, clever and enticing 30-seconds speech? If not, it’s time to practice.

7. Offer a free consultation meeting:

Get the conversation going by offering a one-time meeting, no strings attached.

8. Send press releases about news and events:

When you have something interesting going on, create a compelling story and send it to multiple PR submission sites.

9. Tag related people in your social media posts to encourage engagement:

Get people’s attention by tagging their social profiles in your posts.

10. Get featured on testimonial pages of services you use, testimonial pages are a win-win platform.

11. Write guest posts on relevant blogs:

Writing your own blog is great, but chances are that you can reach a broader audience by publishing your posts on blogs that already have a large readership.

12. Create a contest or challenge that requires social sharing:

Instead of asking for entries, get contest participants to share your content for you. Save money on prizes by offering your own product or service.

13. Network on LinkedIn:

The world’s largest business social network is great for generating new contacts, join in on industry conversations and highlight your unique professional edge. Be sure to start by checking out this article on smart marketing with LinkedIn.

14. Use a branded email signature:

Adding a logo and the link to your website will get you more clicks as well as increase your branding as a serious professional.

15. Establish yourself as an expert with a video blog:

Break down your field of expertise into key questions and turn them into informative video guides.

16. Chime in on trendy hashtags:

When you’re working on your daily social posting, have a look at the current trending hashtags and see if you can utilise them in your content to increase the reach.

17. Learn the power of Local:

Focusing some of your marketing energies on your local community adds a personal dimension to your branding. Local events, news and networks can give you faster results than aiming at a national audience.

18. Follow-up with past clients:

Don’t neglect to treat your clients with care and respect once they completed their purchase. If you show them continued attention they are far more likely to return for more.

19. Make sure vendors and contractors are on your side:

The people you work with daily can become devoted ambassadors for your brand if you take the time to build a meaningful business relationship with them.

20. List your business with online directories:

Excellent method to improve link building, which is an important way to climb higher in search engine results.

21. Volunteer your branded products for use in productions and events:

Visibility is powerful. Even if you don’t get a monetary return when you loan or donate your products to a short film production, a festival or a workshop, your brand presence still makes an impact.

22. Get involved with community projects:

Wonderful for your personal growth and for your business reputation.

23.Offer a VIP discount code to a selected group of followers:

Make them feel special with a limited offer that only they can enjoy.

24. Discover niche social media platforms:

Everyone is on Facebook, true, but smaller niche networks provide a far more targeted audience for your brand. If you find one that fits your industry, you should put some effort in establishing your presence there.

Taken from:
24 Free Ways to Market Your Small Business
July 6th 2015 | Small Business Tips

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A third of UK adults are or want to become entrepreneurs

Taken from Elite Business Magazine – by Jess Mackinnon

Research finds one in three adults own or plan to start their own business, with a desire to be their own boss and a dislike of working for others cited as the most common motivations Running a business can be a big responsibility but the UK isn’t shrinking from the challenge, with increasing numbers being drawn away from the rat race to pursue their entrepreneurial dreams. According to research from Groupon, more than one-third of adults either run their own business or intend to start one.

Produced in conjunction with Climb Online, the digital agency founded by Mark Wright, the 2014 winner of The Apprentice, Groupon’s research found that many workers are now choosing to go it alone; it revealed 37% adults currently own or are looking to launch their own business. Those aged 16- to 24-years-old are apparently the most eager to forge their own path, with one in ten saying their ultimate goal was to set up their own business, compared to the national average of 5%.

According to the research, 53% said they wanted to start their own business because they would rather be their own boss, whilst 60% didn’t want to work for someone else. Additionally, 40% of respondents said they think it will offer greater flexibility in terms of hours, 26% said they want more control over how the business is run and 11% said they’d been inspired by friends and family who had set up their own businesses.

And it seems this is changing the way young people are viewing education. Over two-fifths of 16- to 24-year-olds said further education was not worth the financial investment for those with a business career in mind. Meanwhile, 12% of those who had started or planned to start a business said launching a startup was a good alternative to further education and 16% said they’d rather be earning than sinking loads of money into tuition fees. It also seems that this isn’t a generational issue: nearly half of adults who were in the process of setting up their own business agreed that higher education was not worth the investment.

Perhaps part of the reason for this is that many people believe they have skills that they can monetise and utilise to build a thriving business; the research revealed that 20% of UK adults are making money from a hobby or skill and another 23% plan to do so. Amongst 16- to 24-year-olds this idea was even more popular, with 30% gaining a profit from their hobby or skill and 53% wishing to do so.

Clearly then, with such a high proportion of people looking to start up on their own, the UK has a bright entrepreneurial future ahead of it. 

Author: Jess Mackinnon

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Get Paid on Time – and What if you Don’t

Guest Blog from Pierre Haincourt MCICM – Credit Limits International Ltd, Faversham, Kent

A local client who runs his own one man building company once told me: “you know Pierre, I think small businesses like us think that only large companies use debt collectors and that credit policy, client risk, credit risk, credit control, payment reminders, debt collection, County Court, are things that only large companies have in place”.

This is not the case. Small and micro businesses, more than anyone else, need to make sure they get paid for their work so they do not put the financial health of their business at risk.

There are a few simple things, “common sense” basically, which can very easily be put in place to avoid non-payment.

  • CREDIT POLICY:

How you treat your customers from receipt of their order to full payment of your invoice?

Today, you are happy: you have received a new order from a new customer.

If you run an online shop and payment has already been made through your website by credit card before you do the work or ship the goods, you are usually OK, except when you get a “chargeback” of course.

Otherwise, unless it is customary in your industry to get payment upfront, you need to decide if your customer is good for the money.

This is where your Credit Policy starts, and it does not need to be more than a few bullet points:

  • Assess the new client (gather information)
  • Assess the financial risk associated with the order (small, large…)
  • Determine the payment terms (on credit, full or part payment upfront)
  • What if you don’t get paid (letters, phone, email, visits)
  • Do you apply Statutory late payment sanctions (“Late Payment Act”)
  • Do you escalate in-house using “MCOL” or instruct a collection agency or a law firm

This does not have to be a one size fits all policy but you need to ask yourself these questions upfront, before you decide if you are going to accept an order from this client and give him credit.

  • CLIENT RISK :

Know your customers

Let’s get back to our online shop. When you shop online, you need to complete a client form:

Name, company name, address, VAT number, telephone, mobile, email, delivery address, etc.

You still need to gather this information when your customer comes to your shop, your office, your workshop or when you first meet him over coffee. His business card is not enough. If you have a new customer application form, you are a real pro. If you don’t, you need to at least gather basic information about your new customer as this is the foundation of a strong relationship.

Check if the company is Limited and which position your contact holds within the company. If the company is not a limited, it is good to find out the private address of the trader/partners. After all if you are doing business with an individual you want to know where that person lives, right?

You should also manage to get your customer’s bank details.

Do the chitty chatty and find out how long he has been trading, how business is going, how he is finding the market and write all of this information down later.

It will be interesting to see how close to the reality this is when you do your research later.

If the company is Ltd, go to companies house to get all the information about it: Since 22 June 2015, it’s all free! Although I am not sure if this will be forever. But for now, you can go to:

https://www.gov.uk/government/news/launch-of-the-new-companies-house-public-beta-service

https://beta.companieshouse.gov.uk/

  • CREDIT RISK :

Will you give your client credit and how much?

What trust are you prepared to place on him?

Now you know your client, you should be able to decide how much credit you are willing to give him and for how long. But even if your client is “good for £10,000 over 90 days” are you financially able to give him credit, and wait this long? Do you have a choice? What is the competition doing? Do you need to finance the transaction (now, this is another topic…)

Remember that Statutory credit terms are 30 days. A large client should not put unreasonable pressure on you for longer payment terms if 30 days is the norm in your industry sector.

Establishing what your costs are to produce the goods or services you are going to sell to your clients is a good place to start. If your market (= your competitors) allows it, try to get a part payment upfront. This is also your client’s confirmation that he is fully committed and it will at least cover all or part of your costs.

The size of the order is also critical. Again, depending on how your market and your competitors operate and what finance or credit you are able to get, you may need to give credit terms to as many clients as possible, or you may be able to get a meaningful part payment upfront, staged payments throughout the contract, Direct Debit, or better: full payment upfront.

Once the work is done you absolutely need to invoice your customers promptly, otherwise your cashflow will be adversely affected.

If the contract stretches over a fairly long period of time, you need to have agreed staged payments beforehand. Don’t run out of cash half way through. And remember: customers do not like surprises, so be clear about when you are going to invoice for your work and what your payment terms are.

Typically, you will take a number of actions in-house (letters, phone calls, emails, visits maybe…), add late payment charges in certain circumstances, and decide when you are wasting your time chasing what has now become a debt, and how you are going to escalate your collection actions.

  • CREDIT CONTROL :

You have given your client a credit limit and

30 days credit but they have not paid…

So you need to chase them for payment

Good cash management has to include a plan in case your customers do not pay you on the due date.

Late payment is now being viewed as a big “NO NO”

If you have done everything right, so should your customers.

But a customer is such a valuable commodity, especially when you rely on repeat business.

So even when they do not pay on time you cannot shout at them in the way they shout at you when you do not deliver on time…

So reminder letters or phone calls should be professional, tactful, inviting communication, at least initially. As the debt becomes older, reminders need to become firmer but always business-like.

Late payers are now officially considered bad for the economy and there have been a number of EU and UK led initiatives since the late 90’s which are starting to have an impact on our payment culture, 25 years later…

The Late Payment of Commercial Debts (Interest) Act 1998 which was last reinforced in 2013 enables you to add 8% above BoE interest rate, plus a fixed compensation sum per contract of £40 for contracts under £1000, £70 for contacts between £1000 and £10,000, and £100 for contracts over £10,000, and to recover reasonable collection costs which you incur when using a third party such as a debt collection agency to recover your debt.

See: http://payontime.co.uk/late-payment-legislation-interest-calculators

More recently the prompt payment code has been launched as a joint initiative of the Chartered Institute of Credit Management (CICM) and the Department for Business Innovation and Skills (BIS). You can see who the signatories are and if your client happens to be one of them, you may want to remind him of his commitment to pay his suppliers early, and become a signatory yourself to promote good practice!

  • DEBT RECOVERY:

You did not get paid on time so you need to react quickly. What do you do about it?

You have a number of options. Doing nothing and letting your debt age is not an option.

Unlike wine, it won’t get better with age!

You can take your customers to Court yourself, online by using “mcol”:

https://www.moneyclaim.gov.uk/web/mcol/welcome

This tool is designed for traders to resolve their non payment issues themselves. However, do ask yourself if this is what you ought to be doing with your time.

Who is driving your business forward when you are collecting your debts throught the Courts yourself?

If you decide that this is for you, and if you win, you will get a judgment.

Alone, this judgment will not get you your money back.

It is merely a document from a Court validating that you are owed this money. To turn your judgment into cash, you will need to enforce it. To do so, you can instruct the “Sheriff” (as seen on TV!) if your judgment is for at least £600, or make an application to the Court to seize wages, bank accounts, or for larger debts obtain a Charging Order on your customer’s fixed assets.

Using a debt collection agency may give you a final opportunity to get the matter settled amicably and to get your customer back in one piece (if you still want him as a customer that is). They usually work on a commission basis so they should not cost you anything unless they collect, and if they collect all, their services should be free of charge (in business to business transactions only). All debt collection agencies do not offer the same levels of service so check what they offer and if the one you select is a “one stop shop” they should do everything including Court work. Others just focus on offering a local doorstep collection service.

You can also use a firm of Solicitors who will typically send a “letter before action” giving your customer 7 days to pay and issue a claim in the County Court if there is no reaction. Court fees have drastically increased in 2015 so check what the costs will be. Remember that you will not recover your legal costs in defended matters under £10,000 (Small Claims Track).

As you can imagine, reaching this stage is no fun at all, so remember to build strong foundations to your credit relationship with your customers so it remains a rare occurence!

Pierre Haincourt MCICM – Credit Limits International Ltd, Faversham, Kent

@pierrehaincourt

pierre.haincourt@creditlimitsinternational.com

Debt Recovery Specialist/Seasoned Negotiator/Published Author/Cashflow Advisor/Conference Speaker

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What can I call myself?

What are the restrictions on choosing a name for my sole trader business?

If you’re looking to start up as a sole trader but don’t want to use a business name that already exists how do you check? . Are there any restrictions on business names and how can I make sure I am not copying an existing one?

Corin Elliot writes:

When starting a business, inevitably one of the first decisions you will need to make is choosing your business name. You will need to decide on your business name before you set up a business bank account, design and order stationery, register with HM Revenue and Customs and plan your advertising amongst other responsibilities.

Salad Bar?

Salad Bar?

A business name can make or break your business so it’s imperative you get it right first time. Firstly you need to make sure the name you choose does not include any terms that are restricted in use. Many terms such as English, Association, Royal, Federation and National to name but a few, require permission from various organisations and institutions including the Department for Constitutional Affairs or the Secretary of State. It is possible to obtain permission for use of most restricted terms, however, there are strict criteria to be met.

Once you’re sure that your chosen name does not include any restricted terms, it’s important to make sure it’s not already in use by another business or company operating within your industry and geographical market area. Copying, or passing off as it is known in legal terms, can have a catastrophic effect on a new business and potentially destroy it before it can get off the ground.  Therefore is vitally important that your business name is unique and unlikely to cause confusion with an existing trade name.

However, it’s not just your business name that needs to be researched when launching your new enterprise. Trade marks and domain names are just as important in today’s competitive market. There are approximately 2.5 million registered trade marks in the UK and each and every mark is protected nationally. Should you copy a registered trade mark, you would have to recall and destroy all business materials including stationery and advertising literature. You may even have to forfeit all profits made under the trading name.

Conducting detailed research into existing business names and trade marks is therefore essential before embarking on your new business. However, once you’re sure you have chosen a business name that’s available for use you should check the availability of the appropriate domain names.  You can spend thousands of pounds on advertising and web design but if you don’t own the right domain name you could be missing out on a very large market.  Once you have chosen your business name, trade mark and domain names then registration is the best way of protecting these assets.

You can carry out free online searches against 10 million registered entities operating in the UK at www.start.biz. There are already two million businesses, 2.3 million companies, 2.5 million UK trade marks, 7 million European trade marks and 4.2 million UK domain names – and there are 25,000 changes each month.

Your business identity is your most important asset. Make sure it’s yours, its legal and it’s protected.

Corin Elliott is business development manager at National Business Register.
Taken from an article by The Startups Team Updated: Oct 3, 2013 Published: Dec 22, 2009

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