Top tips for starting a business

For those starting or growing a business, it’s important to navigate the available support with confidence. So, here are some sources of government assistance that could help in 2017.

The government is also worked hard at consolidating its support and making it more navigable. The Business is Great site aggregates support, advice and inspiration for growing businesses, and collects together the available finance and support schemes on a finder page with filtering capabilities. So here are our top 6 tips:

  1. Grants
    Today, most national and local grants focus on particular business activities or purposes. There are some grants for investment, some addressing energy use and the environment, some geared towards training and some in the form of tax reliefs like R&D tax credits. It’s not quite the landscape it was for grants, with programmes like Growth Vouchers having been wound up in 2015, not to mention the closure of the Business Growth Service in early 2016, but there is still plenty of support available.

    1. Investment  
      There are regional grants (partly through the Regional Growth Fund programmes) that support growth through capital investment and job creation. The location of your business may increase your chances of successfully applying for a grant. You may be eligible for support if you’re starting a business in an economically disadvantaged area.
      Local support (eg. subsidised rent and rates) is also often available to encourage small businesses to start up in particular areas.
    2. Innovation  
      There are many grant schemes that encourage research and development (R&D) activities in the UK’s high-tech industries. Support is available for investigating an idea right through to proof of concept and development. R&D grants that focus on specific industries are launched from time to time, and there are well-established tax reliefs that support a wide range of R&D activities.
    3. Energy and the environment  
      These schemes recognise the additional cost for businesses that adopt or engage in investments that improve energy efficiency and reduce environmental impact.
      R&D programmes are available to companies working on developing energy and environmental products.Grant schemes may be available for new buildings or for refurbishing existing buildings that aim to improve energy use. Capital allowances are also available to businesses that install energy-saving equipment and processes.
    4. Training
      Assistance to develop the skills and capability of staff is provided through apprenticeships. The National Apprenticeship Service gives advice to employers on how to start an apprenticeship scheme in their business, and currently the offer is being promoted through the government’s Get in, go far site on apprenticeships.
    5. Tax reliefs
      If nothing in the government offer quite fits with your business, don’t despair. The government, as mentioned briefly already, offers support through tax schemes such as R&D Tax Credits and other capital allowances to reduce tax liabilities.
  2. National Business Support Helpline
    The second broad area to focus on is the Business Support Helpline, which remains a notable element of the government’s business support provision.
    It provides signposting, diagnostic support and business improvement advice to pre-starts, startups, and existing businesses to help them start and grow. The service provides national information, which all businesses require, plus advice and signposting to local sources of support (this is something that has grown in importance with the establishment in 2011 of Local Enterprise Partnerships and the LEP Network).
    The helpline is also useful for signposting and explanation on how to use the finder page with filtering mentioned already.
  3. GOV.UK website
    The next resource to flag is the GOV.UK website. This is a single point of access to all government services and information, and national and local publicly funded business support services. It provides advice and information on what businesses could and should do to start well and thrive.
    Apart from the finance and support database, the website also has information on:

    1. Employing people
    2. Money and tax
    3. Business and self-employment
  4. Government national business support programmes
    In recent years a lot of government support programmes have closed. The likes of GrowthAccelerator and the Business Growth Service are no more, and with the closure of the Growth Service we’ve also lost subsidised resources like the Manufacturing Advisory Service, though some that worked in that space have continued offering their services on commercial terms.
    What does that leave?

    1. Mentors ME is one resource that is going strong. It provides access to 15,000 trained volunteer business mentors, from the SME community to boost local mentor networks.
    2. The Department for International Trade has recently taken over as the government’s overseas trade support service. For many years this was familiar to people as UK Trade & Investment. It provides advice on export capability and opportunities, contacts in overseas markets, arranging overseas visits, ecommerce, export training and market research. All in all, it’s still a strong resource for any would-be exporter or international trader.
    3. Innovate UK is the latest name for what was the Technology Strategy Board. It provides grant funding (not advice) to support R&D and innovation activity to companies across the UK mainly through web-based competitions, some of which are targeted at SMEs (eg. the Smart Programme and Innovation Vouchers). It also supports networks to connect partners to promote knowledge sharing.
    4. The Design Council’s Designing Demand Programme is a small national programme that helps SMEs use design to improve performance through bespoke packages of design support and coaching delivering through design associates.
    5. The Intellectual Property Office provides resources and support to protect intellectual property. It provides services such as workshops for SMEs, IP awareness-raising and online assessment tools. It also trains independent business advisers as IP auditors so that they can advise SMEs on IP issues.
  5. British Business Bank
    1. The fifth resource-set to flag is the British Business Bank. This is a relatively new government initiative. Its website has easy-to-understand information on all types of finance and their relative advantages and disadvantages.
    2. The aim is to make finance markets work better for small businesses in the UK at all stages of their development: starting up, scaling up and staying ahead.
    3. The British Business Bank is government owned but independently managed. It brings expertise and government money to the smaller business finance markets. It doesn’t lend or invest directly. Instead it works with over 80 partners such as banks, leasing companies, venture capital funds and web-based platforms.
    4. Businesses apply for finance through partner businesses, and because the businesses work with the initiative they can lend and invest more, especially to younger and faster-growing companies.
  6. Local help for business
    Last but not least we come to Local Enterprise Partnerships (LEPs), which have grown in importance with the government’s evolving localism agenda.
    LEPs have been running since 2011. These are a voluntary partnership between local authorities and businesses in England to help local economic development. As a result of recent government initiatives, LEPs are being now supplemented by Growth Hubs affiliated to all the LEPs. These provide a single local access point for all public and private sector business support – effectively a ‘front end’ for LEPs and other national local economic support.
    Growth Hub partners include chambers of commerce, the Federation of Small Businesses and other business bodies, universities and university business schools, other private sector bodies (including local partners delivering national programmes) and national government.

Is there something we should add to the list? Let us know …

Loosely taken from and thanks to:

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Mobile Friendly Websites?

Guest post from one of our associates – Nigel Stevenson

I’m going to concentrate on the present big issue with website design …

“Mobile friendliness will affect how prominently websites appear in Google search results pages from 21 April”

True? In this blog I look at…

• Local v National search results
• Why go mobile friendly?
• The stats
• Can mobile users still see my old pages?
• What’s the cost of converting my old website to ‘Google Mobile Friendly’
• How do I know my new (or old) website is ‘Google Mobile Friendly’?

My colleagues and I have been monitoring this massive shift in Google’s search technology and I must admit to a minor fit when first announced not only because of the impact it would have on you as a client but the possible workload ‘spike!

Initial thoughts
In slowing down to a panic and monitoring a benchmark set of client’s positions on Google we came to the following conclusions…

Local v National searches

National searches (from mobile devices using the Google App), will be influenced by this new algorithm, in fact if you use the Google App on your mobile phone to search for services you will see a grey text legend next to some listings saying ‘Mobile-Friendly’.
With a higher percentage of websites now conforming to Google’s new requirements, the UK’s top search engine can be more picky giving preference to ‘Mobile-Friendly’ web pages.

Local searches appear to be delivering different results, probably because Google can see by adding ‘Kent’ or a ‘town name’ (to the search string) the result totals are less so delivering a ‘Mobile-Friendly’ website could deplete depth of results.

Try this test – search on Google using your desktop device (not logged into Google) – Search – “builders in East Kent”

Builders in East Kent

First 3 pages profile the following !! OHM designs (none are Google Mobile Friendly)

Page 1 (ex-client but still using our SEO)

Page 2

Page 3 (cleaning service for builders)

The same search on a mobile phone…
(using HTC M8, Google App, WiFi connected, GPRS on)…

Page 1

Page 2

Page 3

In conclusion Google’s new mobile friendly algorithm doesn’t appear to be influencing traditionally built older websites on local searches (yet).
So why go mobile friendly?
It’s a great call and one we’ve been bouncing around for a few months.

Graph 1
The graph showing the increase in mobile phone use …

Image from Morgan Stanley Research




The stats
94% of people with smartphones search for local information on their phones (source Google, USA).
77% of mobile searches occur at home or at work (source Google, USA).
Offcom stats – – massive increase in 4G use.
Mobile use on the increase .

It’s obvious from these stats that mobile devices are being used more and more for everyday tasks which includes web searches so it makes sense to make your web platform more mobile friendly.

Can mobile users still see my old pages?

Yes, and (as above) the local search results do not appear to be affected.

What do you suggest Nigel?

First of all, don’t panic! The vast majority of our clients use local search terms with their trade keywords therefore you are unlikely to be affected by this change (at the moment). Try the same test I did for “builders in East Kent” using your trade and geographical search terms and see the results – send me the results

What’s the cost of converting my old website to ‘Google Mobile Friendly’


About 50% compared with a new design as we are using existing content already on our systems.

In addition you also get a great package…

• Update all pages yourself – text content, images etc
• Post news and special offers yourself
• Change SEO content on every page yourself (NEW)
• Add slide shows (FOC as part of a re-design)
• Add contact forms (FOC as part of a re-design)
• Integrate with Social Media pages (FOC as part of a re-design)
• Google Mobile Verified pages
• Future proof

Sample conversion
Esther (Elite Beauty) called last month asking for some changes to her web pages, I explained the Google Mobile issue so she agreed to convert.

Old site:
New Mobile Friendly site:

Esther’s feedback “Yay it looks sooooo good!!! And on a phone as well x thank u so so much for changing all the little bits and getting it to where it’s perfect x x I love it”

Mobile test

How do I know my new (or old) website is ‘Google Mobile Friendly’?

Click on this links and add your web address:

Remember this, Google is being nice to old pages at the moment but do not be surprised if they axe none mobile friendly pages from their listings as the global giant strives to deliver a better product.

Nigel Stevenson is Director of Oast House Media (01304 369 440 :: 07931 376 255)
He is also an Associate of The Centre for Micro Business.
Oast House Media Specialise in: Website Design :: Search Engine Optimisation :: Logo Design :: Print Design


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Crowdfunding – how to sidestep the banks – help from the FSB

The Federation of Small Businesses (FSB) and the UK Crowdfunding Association (UKCFA) have come together to give small firms and start-ups advice on how to access finance through crowdfunding.

Recent FSB research showed that only 37 per cent of its members are aware of alternative finance providers, such as peer-to-peer lenders and crowdfunders. The FSB believes this type of finance can help firms access funds needed to grow, especially as many smaller and start-up businesses find it difficult to access through the high street banks.

Crowdfunding is a method of raising funds from investments from many people online, through a dedicated platform. According to NESTA, in 2011, crowdfunders raised $1.5 billion, mostly in the US, to finance over a million projects. The organisation says the UK crowdfunding market is growing.

Roger House, FSB Chairman for Kent and Medway, said:
“Most people’s first thought about crowdfunding, is pitching on a well known TV show. If they like your idea, they’ll give you some money in return for some equity in your business. While those people get to pitch in person and answer any questions, crowdfunding means pitching online, so getting it right is more important than ever if you’re going to succeed in getting finance.”

“The FSB has been an advocate of alternative sources of finance for some time. We believe more people will look at crowdfunding as an investment opportunity as investors can take advantage of tax reliefs if they invest in start-up and early stage businesses.”

The top tips for getting your business crowdfunded are:

  1. Proper preparation prevents poor performance: Just with trying to get a bank loan, having a clear business plan will demonstrate the business’s potential to the crowd. It will help give persuasive answers to the crowd and show them you’ve done your homework and researched the market and competitors.
  2. Make your pitch compelling: Keep the pitch simple and avoid using jargon. This will help potential investors understand who and what they are backing. Consider using video rather than just a written pitch.
  3. Market potential, the entrepreneurs and the idea: Investors will want to see you have a good idea that will give them a good return, but also that you have a team that will deliver the end product.
  4. Promote you and your venture today: Begin warming up the crowd with the idea so they are eager to invest when the pitch goes live.
  5. Be realistic: Don’t be overly ambitious with the funding target and don’t over value the business as this can put the crowd off. Set realistic targets which you can back up when the crowd ask questions.

Julia Groves, Chair of UK Crowdfunding Association, said:
“Crowdfunding in its many guises is already filling the gap left by the retail banks, and has to date channelled more than £1 billion of money from the UK public into the real economy.”

“Whether you are a very new business raising seed equity to get started, or a more established businesses seeking a loan to grow or diversify, there are opportunities to bypass the banks and raise this money directly from your customers, neighbours and the general public. So you get not just financial backing but the backing of the crowd.”

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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.

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:

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New Access to The Centre for Micro Business

At The Centre for Micro Business we are always looking for better ways to service our customers.  To this end we have partnered with East Kent College and opened a new office at their premises in Broadstairs.  As part of this relationship we are able to access students studying business with the Peter Jones Academy – also based within the college, and we hope to use these talented young people to help those new start businesses we support.   East Kent College also have  bases in Dover and Folkestone which we can also now use to meet clients to discuss their needs.

dpstartupzonelogoWe at The Centre for Micro Business have also partnered with Discovery Park, near Sandwich.  Discovery Park have just opened a new start up zone, which offers hot desking, as well as small and medium sized offices.  As a tenant of Discovery Park within the startup zone you would have full access to all the other facilities on site which include a bookable Board Room for meetings, cafe and gym and much more.

If you like to meetup to discuss your Micro Business Startup or Home Based Business development working in East Kent please contact us on 0300 030 9660 to arrange a FREE appointment.

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The New Bank Referral Scheme

News from the KPMG business advice website:

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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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.

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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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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.


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.


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:


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.


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.


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!


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”:

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


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

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