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The Challenge for Small Businesses – VAT

Recently I went on a fabulous trip to London to Visit 10, Downing Street organised by Enterprise Nation.

We were encouraged to consider key areas to discuss with government that we felt would help small businesses to thrive. Having worked with businesses for 13yrs in a variety of capacities, I was passionate about how the VAT threshold was impeding growth and was focused that this was one of the main areas to discuss (along with several other ideas on my agenda). For those of you who know me, sticking to purely one idea was difficult, however in discussion with everyone else I was able to bring up at least 2 suggestions.

Firstly, With ERDF grant funding ceasing in 2020 I raised the issue of schemes that the government could embrace after BREXIT, in particular Growth Vouchers, which would show the government’s commitment to supporting post start-up (3-5yr +) businesses. I remain hopeful that this scheme will be re-introduced.

Secondly, I raised the issue of VAT reduction to 10%, (hear me out!) as this is the subject for this BLOG.

VAT: My thoughts – Don’t fall asleep

As many of you reading this are aware there are three main types of tax that are relevant to most organisations: income tax; National Insurance (NI); and Value Added Tax (VAT) and of course Limited companies are also liable to pay corporation tax. (Next time I’ll discuss corporation tax, if I’m ever invited back!)

As a business owner reading this you are conceivably paying VAT or are under the threshold and considering whether to register. Those with larger businesses are possibly remembering the day your business registered with HMRC especially if it was several years into trading. Perhaps as you read this you are recollecting the pain of the year after registration, when perchance some customers fell away due to price increases. As VAT is a tax on most sales, services and imports, and is paid at each stage of the production and distribution chain it has a large part to play in most growing businesses.

If a business expects to turn over more than £83,000 a year (and the business does not exclusively sell goods or services that are exempt from VAT), that business is required to register with HMRC.

Having supported over 600 SME’s the threshold has become a ‘growth-sticking-point’ for many of my clients.

Let me give you an example from my own client base.

I supported a small business owner who at the point of contact had 3 businesses one of which was a hair salon. As you can image its primary focus was the blue rinse brigade, with poor hourly profits, low price points and concerns over sustainability. We worked together and identified a need for salon software to interrogate the statistics and monitor performance as they made changes. We created a focused marketing strategy profiling their consumers, improving the client base to attract additional higher paying customers, thus increasing profitability. Over the first year they grew into a reputable, well priced, salon with good patronage and a secure employee base. Through competitions and incentives the hair salon became successful in the town, a vibrant growing business.

And then they ‘hit’ the (then) threshold of £73,000.

Could they afford to increase a perm from £50-£60 potentially losing customers to the competition next door? Were they going to have to absorb the VAT within the business? And was this going to affect turnover and thus send the business into a downward spiral

Because registering for VAT requires a business to charge VAT on the products and services, it was a huge consideration for my client, did they want to grow anymore, or just tread water? How could they survive charging VAT on every appointment? Yes, once registered, the business would be entitled to claim back the VAT that it had paid for business supplies and services (input tax), however the difference in purchase of shampoos and hair products which is deducted from the output tax before the business paid the difference to HMRC would not make a sizeable difference to such a business. In this case the Hair salon chose to grow and pay the standard rate (20%). They registered with in trepidation, however, due to the new client base managed to continue and eventually grow. I’m unsure whether they would have survived quite the same way had they been solely reliant on their elderly clients. Thankfully 8yrs on they are still growing and expanding.

However this is not always the case in business. I sometimes laugh that I am the 4th emergency service, as some business owners seek support in desperation a year after registering, questioning their survival. However on a serious note it is not a laughable matter. I have additionally known businesses diversify in order to avoid the tax, and have seen tax concerns stunt growth and indeed some register and see their business disappear.

In my opinion having a standard flat rate of VAT across all industries immediately they register with HMRC creates a level playing field from commencement of a business. This encourages businesses to grow, be the best they can be and indeed be more competitive in Europe and the rest of the world.

I am sure the government has the statistics on business turnover and how if EVERY business paid VAT it would affect business contributions. But if all SME’s are VAT registered at this rate they are also not paying out 20% so profit margins would be better and thus the possibility of contributing sustainably to the economy, indeed becoming future employers.

Win: Win.

I hope the government does consider the benefits of reducing VAT to 10%. Let’s watch this space

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Death of the High Street?

I’ve been contemplating all the hype about the demise of the high street and whether this is really the effects of BREXIT or just an avoidance tactic of what is really happening in the retail sector.

As a retailer in the 80’s and 90’s in largely independent shops and a few well known chains I appreciate the challenges retailers face. Now a business advisor to many in the retail sector it is clear that high street shops do face some hurdles:

Consumer fears: Fear of the unknown combined with media persistence of relentlessly covering the negative impact of brexit is encouraging consumers to hold tighter to their purse strings, feeding fear of future recession; inadvertently creating the very financial crisis they wish to avoid. Decreasing spend, combined with the rises in inflation and lower wages, are reducing consumers confidence in buying from high street shops.

Ecommerce: the rise of armchair consumerism is growing as the millenials increasingly utilise social media websites and apps to find a date, socialize, order food and purchase even larger items 24/7 all with a promised next day delivery. Increasingly the opportunity to compare and utilise budget sites such as Ebay, Shpock, Amazon and more are encouraging the younger (and indeed the elderly) generations to avoid the busy city centres, increased parking charges and surly customer service in preference to buying online

Experiences: Consumers are now preferring their leisure activities to be “experience-led” whether for an adrenaline rush, a music event, a comedy moment or food; unique opportunities and special moments are rewarded by customer loyalty rather than the purchasing of just “things.”

The effect on retailers should not be underestimated.

But is this all negativity necessary? Our society has seen change consistently in its history. The small independent retailers replaced in the 80’s by supersized superstores with mass produced items we all wanted, and so we ALL had.

Independent retailers suffered during the 80’s, 90’s and into the new century and only the truly unique and exclusive survived. How ironic that these retail giants are being replaced by an online consumer, reminiscent of those who moved from the independent to the superstore in the first place. But isn’t this excellent news for independent shops again? Consumers now want something more. Consumers want experiences, to be “loved” “valued” and given something more than a quick sale; purposefully choosing elite towns and cities to buy and experience something different. Only the retailers who embrace this will survive.

My advice is “Let’s stop blaming the demise of the high street on BREXIT but embrace a new way of trading again.”

Consumers ARE still buying it’s just their habits are changing.

Last month, wages outpaced inflation for the first time this year which will have a positive effect on U.K. growth, with projections on target for 2% growth this year. In Quarter 1 2018, the value of household spending in current prices increased by 3.3% on the same quarter in 2017. When comparing the volume measure of household spending in Quarter 1 2018 with the same quarter in 2017, it increased by 1.2%. (ONS Gareth Powell 29 June 2018)

If we look at the restaurant businesses for guidance we can see a change in consumer behaviour for healthier eating and experiential dining and an increased focus on food provenance and sustainability the retail sector needs to learn from this.

Local sourced, unique, handmade products from independent retailers who offer an experiential shopping environment hold the future.

But towns and cities need to help. High rents, long leases and poor management will not encourage independents to return.

A revision of traditional retail into one of pop-ups, shared spaces and shorter leases will ensure our high streets remain vibrant and give shop owners the ability to profit and improve our economy.

With changes in every industry it is an exciting time for innovators, entrepreneurs, retailers, manufacturers and designers through whom the UK can grow and prosper.

We have seen significant changes in business operations throughout our British history; from cottage industry where consumers bartered and artisans were celebrated, artists prospered and individualism grew came the mechanisation of the textile industry, in the late 18th century. Tasks previously done by hand were brought together in a single facility, and the factory was born – the industrial age, with emphasis on production. This progressed in the early 20th century, into the age of mass production; thus impacting on retailers and handmade products; retailers following with mass produced lines.

However, since the 80’s came a third revolution – digitalisation. ( I remember when our shop had it’s first computer it was a frightening investment.) With the technological age came a focus on electrical systems, enhanced travel, computerisation and the internet and our retail habits have naturally followed suit with many having an E-shop facility.

So what next? are we are in a new age? Are we returning to preindustrial Britain? And need we fear change or embrace it?

Change made us Great Britain. We are still Great Britain. Let us not forget that when faced with challenges we always find solutions and progressive ways of working.

We still have artisans, artists, innovators, entrepreneurs and need to find new ways of working in a digital age. Yes, the retail sector has to change but its advent will provide exciting times ahead.

 

Death of the high street – I doubt it? Change? Absolutely.

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Collaboration

The dictionary definition of collaboration is “The act of working together with one or more people in order to achieve something”

The most successful people in business are those who put their competitiveness aside and work with others combining their strengths with those who possess complementary skills, services and products to achieve a common goal. Being aware of one’s own abilities, be they soft skills or specialisms, and working collaboratively invariably leads to a better outcome. There is no benefit in envying another person’s capacities, poaching an others customers or ‘bad-mouthing” the competition.

Rather than using energies focused on trying to outdo someone who has strengths you don’t have or denying your own strengths; by focusing on how you can ‘work together’ you focus on your joint demographic and achieve your common goal. Knowing what you can contribute and being able to work with others who possess skill sets beyond yours can extend the value of your services and products thus giving you a greater market share.

For example, if your talent is as a seamstress and you have one friend who has strong financial skills and another who is a talented interior designer, you could collaborate in a business venture where each of you contributes your abilities to launch a business; the interior designer could provide the designs, the financial person could attract investors and keep the project on track and the seamstress could manufacture the soft furnishings. Let’s take this one step further, by working as a collaborative team with an architect, an estate agent, a garden designer, a furniture maker, a decorator etc, the solutions for a home buyer or home improver become endless. Each person working independently could not be nearly as successful as when they combine their skills to provide an exceptional service and together build a successful customer base. The world needs people who work together harnessing what they’re good at and seeing others as the complement to achieve.

The phrase ‘putting our heads together’ perfectly describes the most important element of collaboration. Two or more people with a strong sense of purpose and common goal with an undeniable drive to ‘make-things- happen’ can focus their energy and achieve so much more. Collaboration in business consistently provides greater accomplishment. When it works, the combined intellect of two or more people can solve complex problems and achieve amazing results.

Conversely, competition is, in general, a contest or rivalry between two or more businesses, individuals or groups for the same territory, niche, resources, goods, prestige and profit. It arises whenever at least two parties strive for a goal which cannot be shared, where one’s gain is the other’s loss. Many businesses work in this manner, usurping their power, aggressively cornering the market, and pursuing wealth, power, prestige, and fame at all costs and above any social or ethical conscience.

Whilst some competition is good with regards attaining higher customer care and improved processes forcing businesses to reach a higher quality of services or improved products; with regards business development principles, I believe this attitude to be counter-productive.

There are only 2 ways of working:-

  • Competitively “The activity or condition of striving to gain or win something by defeating or establishing superiority over others”

or

  • Collaboratively “The act of working together with one or more people in order to achieve something”

Ask yourself, how would you rather work?

Now make it happen.

Venus
Venus Awards 2017
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Internal Drivers

“People are only truly motivated by reaching for and satisfying the factors which represent a far deeper level of meaning and fulfilment. “Herzberg*.

FB_20151019_22_36_05_Saved_Picture

Some of Hezberg’s research identifiys that people are only truly ‘happy’ in the workplace when they satisfy real motivators such as
• achievement
• recognition
• work itself
• responsibility
• advancement

However consideration also needs to be made to ensure security within the workplace such as the company ethos and attitudes to:
• policy
• relationships with supervisors
• work conditions
• salary
• company car
• status
• security
• relationship with subordinates
• personal life

HR professionals are right in concentrating their efforts on workplace standards and culture to ensure that employees have an enjoyable and fulfilling work experience and their well-being is important, whilst being paid for their efforts. However we as individuals have no control over an employer’s objectives. Therefore we need to work on areas in which we do have control when seeking work.

I have identified these as
• Internal motivation, and
• Interview dialogue.

Internal motivation
This is self-exploration prior to job seeking. Your life will only ‘work-out’ when you take full responsibility for your choices, and your choice of vocation has to be top of your list. When you identify what your internal drivers are, you are well on your way to finding your next career move, but work has to be undertaken to explore your potential and future possibilities. Interestingly it’s often not the job but the factors in a job which motivate; you’ll notice something about good nurses – they like people even more than they like medicine. There is a clue here about finding meaning in your career. THE JOB ISN’T IT. Whatever you do for a living the role is a vehicle to connect with your internal motivators. When I offer careers advice, I always encourage an individual to explore the impossible as within this often lies the start of the answers.
Hezberg concentrates on specific measurable outcomes as part of our motivation areas such as: recognition, work itself, responsibility, advancement and achievement; these are often values we attach to our work purpose.
It is also important to identify what specific areas of work appeal, for a nurse is likely to have internal motivators such as a social conscience, care for people and an interest in using medicine as a tool. However a person who likes experimenting is more likely to be a chemist and someone without the medical interest may well be a teacher or even a campaigner. Through honest exploration with a career consultant an individual can begin to uncover a realistic route which engages them. Motivation is only one part of our complex make-up which also includes personality, skills, experience and ambition; however without being motivated any career discussion can be futile.
Interview dialogue
The second area we have control over when looking at motivation is indeed the interview dialogue and subsequent work environment.
Many individuals who attend interviews focus on being their best, answering questions and preparing their answers, which of course has its place. When determined to find the right career, importance also needs to be placed upon what the employer has to offer. It is true that whilst research on a company can uncover policies, even attitude to customers and products it does not depict culture, and the truth can very often be uncovered through the interview dialogue. If Hezberg’s guide to well-being at work is to be embedded then questions on work conditions, training, why predecessors have left and company vision are essential. Just like Maslow’s hierarchy of needs we need to consider that an in-depth look at the effects of a business on your personal life, security, salary and status are key components in deciding on a subsequent career move. Spending the time to evaluate which key areas are your non-negotiable boundaries prior to interview is essential, to ensure that the role you choose may be fulfilling and the motivation to ‘stay’ is not short lived.

In the ideal job, the role itself causes you to be eager to get up in the morning, utilizes your skills and personality whilst the values of the company align with yours, leading to longevity of employment.
Is the dream possible? Yes. When the odds are stacked against us, we develop a mental toughness. So Harness your inner strength and ensure that you are motivated in your next career move.

* Frederick Irving Herzberg was an American psychologist who became one of the most influential names in business management. He is most famous for introducing job enrichment and the Motivator-Hygiene theory. His 1968 publication “One More Time, How Do You Motivate Employees?” sold 1.2 million reprints by 1987 and was the most requested article from the Harvard Business Review.

Picture courtesy of Margaret Preuss-Higham.

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New Business advice

It is exciting news that 608,000 businesses were set-up during 2015, and 54,000 this March alone, (©Start-up Britain) whether due to turning a hobby into a business, having an incredible idea or finally following their dream after maybe years of procrastination.

If this is you then welcome to a new and exciting adventure.

To ensure you have the best start it would be a good idea to write a business plan outlining what you want to do and how you’re going to achieve it. NO mountain or hurdle is too high to overcome with robust planning. It may be prudent to also undertake an entrepreneur assessment to gain insight into your own areas for personal development going forward.

Once you have launched your business step one is to choose a business structure for your venture. The main types of structure are: sole trader, limited company and business partnerships, but you can use other structures for businesses that help people or communities, e.g ‘social enterprises’.

You can change your business structure after you’ve started up if you find a new structure suits you better, however its best practice to research what structure suits you before registering. Note: Business structure affects the paperwork you must fill in to get started, the taxes you’ll have to manage and pay, how you can personally take the profit your business makes and your personal responsibilities if your business makes a loss.

Don’t worry though, the most popular start-up model for most people is as sole trader, just check out your other options before you start. You do need to make this decision as you are legally obliged to register with HM Revenue & Customs (HMRC) within three months of becoming self-employed.

It would also be prudent as part of your business plan to work out how you will finance everything until you secure your first client or contract, and ensure you know what kind of outlay you will need to set off successfully. Try to keep spending to a minimum and be conservative about your potential earnings in order that you know your survival budget.

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Then start planning your business launch and enjoy your moment and don’t be PRESS shy, the bigger the splash the greater the impact on your potential earnings.

There are tried and tested methods of sustaining business so do contact me for further information and to arrange support. Needless to say the most important thing is to remain profitable, focus on margins and stay true to your business objectives.

Regardless of whether you are a start-up business or an established business never be afraid to ask for help and take advantage of the expertise which compliments your own.

The businesses I see find a review invaluable.

If you take just 2hrs out of your year you could find out what initiatives are available to help you make your business grow.

 

Finally – Good luck and enjoy the journey

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Career Transitions Workshop – Bournemouth

Career Transitions Workshop – Bournemouth

At a career crossroads?

Becoming impatient with the limits of success and achievement?

Considering whether to start up a business?

In danger of redundancy?

Periods of transition are often times of acute personal discomfort in which you may be facing the gap between your dreams and actual fulfilments. It is often a lonely time, because no one else can traverse the journey other than yourself. However the aim of this course is to start the solution process through looking at the internal conflicts you face when career planning, identifying internal drivers and discussing sources of support. This is a 2hr interactive workshop, where you will be focusing on your own path and starting a process of self-discovery and career fulfilment.

When:
Where: Basepoint Business Centre – Aviation Business Park, Enterprise close, Christchurch. Bournemouth, Dorset BH23 6NX GB – View Map
3d people - man, person and family time concept clock close up. Family, career, life, love, wealth
Choices – Family, career, life, love, wealth
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“I am not afraid…I was born to do this.” – Joan of Arc

Future concept, future word on puzzle piece with back light
Decide your future, find the missing jigsaw piece .

In the midst of a busy life, it is hard to take time aside to analyse career or business direction, yet allocating quality time regularly ensures that you are in control of life events, rather than events controlling you.

For many of us, we only start to look at career options when life changes and we are forced to analyse our direction when faced with redundancy, ill-health or family pressures.

How exciting therefore to be employed, happy and healthy, CHOOSING to make some fundamental changes to your life. Mark a turning point in how you live your life and make the future a decision YOU MAKE rather than a default. Give yourself the chance to ponder, reflect and undertake some soul-searching to extend mental horizons and delve deeper into what matters to you with regards to your motivations and dreams for your whole life. Take the opportunity to wrestle with the questions; Why am I here? What is my mission in life? And CHOOSE to find THE unique work that only YOU can accomplish.

Maybe you want more than to plod through life, going to work and coming home from work and want to recapture the joy of younger years. I am often inspired by Joan of Arc who after losing so much had such direction in life. I find her inspiring and choose to use her as my filter for how to make decisions. Joan of Arc is quoted to have uttered these words:

“Sometimes people believe in little or nothing, and so they give their lives to little or nothing. One life is all we have, and we live it as we believe in living it…and then it’s gone. But to surrender WHO YOU ARE and to live without belief is more terrible than dying – even more terrible than dying young.”

For many of us finding our vocation in life is something we postpone until near retirement, unless we have had an epiphany which has forged our career path. But even then we become jaded with age and politics and maybe need to redefine our goals and ambitions.

Fear is often a contributory factor in changing career, yet fear is often what keep us tied to a job we have held for years. As the title of this piece implies and Joan of Arc also said “I am not afraid…I was born to do this.”, and this is the essence of my writing.

When you take the time to find what you are excited about, and when you allow yourself to do what you; your skills, gifting, motivation, personality and charisma are designed to be, then your work is your passion, you awake to live your life not exist, you do not need to surrender WHO YOU ARE but you can be the person you want to be.

I have met many disaffected mature adults, who were so often told as a child that they were not good enough, or shouldn’t aspire to be something great, indeed were often told they were difficult, disruptive, too loud or too quiet, you get the picture. Yet we are all different and can fulfil different roles in society.

For every difficult child, who won’t take your word for things and is socially ‘difficult’ as a child, there is possibly a philosopher, architect or logician budding, 3% of the country (maybe an INTP © MBTI) such as Albert Einstein or Charles Darwin.

For every loud, extrovert child who has lots of friends, a ‘strong’ personality and is sensitive, ‘wearing his heart on his sleeve’ there is possibly a natural mentor who radiates authenticity, concern and is socially popular, (an ENFJ ©MBTI) such as Maslow, Oprah Winfrey and Nelson Mandela.

And what of dreamers such as Shakespeare (INFP ©MBTI) or individuals such as Stephen Hawking, Bill Gates, Richard Branson, (ENTJ ©MBTI)?

Each person has their own personality type combined uniquely with their upbringing, likes, dislikes, beliefs and skills, and let’s be honest we all have our own strengths and weaknesses. Yet this combination of who we inherently are designed to be is often neglected and we fulfil roles often being described as a ‘square peg in a round hole’.

If you feel this perfectly describes you, then maybe you need to start the career path again. Employ a career consultant’s time to assist you and ensure you spend the rest of your working life, being who you could be.

Dawn Crossingham July 2015 www.D52ltd.com

 

©MBTI – Myers-Briggs Type Indicator® assessment is a psychometric questionnaire designed to measure psychological preferences in how people perceive the world and make decisions. The identification and description of 16 distinctive personality types as described by C. G. Jung personality inventory is to make the theory of psychological types understandable and useful in people’s lives

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Vocation

On my way back home on the last south west train from London, I was relaxing after a fulfilling day at work, when I was taught a lesson about career satisfaction and the importance of finding the right vocation in life.

You may think that I was taught this lesson by a fellow city traveller, such as a CEO or financier, maybe the conductor or train driver; having been in ‘the big smoke’ I could even have learned from a receptionist, a shop assistant, a hotelier or taxi driver but it was from none of these on this particular day.

Reading an article in the magazine ‘the Edge’, by the ILM, my concentration was interrupted as the refreshment trolley came into the carriage. The atmosphere immediately changed, the increase in noise was audible and I wondered what was happening.

As the refreshment trolley came nearer, a happy, jovial man asked, ‘Good evening Madam, would you like anything from the refreshment trolley?’
‘Yes please,’ I responded, ‘a tea would be perfect.’
‘Is that a G&T or a tea with milk?’ he joked, ‘and do you know that Gin is one of your 5-a-day!’ All the passengers around me laughed.
‘Would that be all?’ he asked.
‘No, actually I’d like a short bread’ I responded.
‘Well you wouldn’t want a long bread otherwise it’d be a loaf,’ he concluded. We all laughed again.
‘You’ve missed your vocation in life,’ I commented, ‘you’d be brilliant doing stand-up!’
‘Madam, what do you think I’m doing, if not standing up and making you laugh?’

He had a point. The 19:35 from London to Southampton would have been a great deal duller without his pithy humour.

Here was a man who loved his job. He did not see it as a job working for SWT serving refreshments, but a vocation to cheer up tired commuters after a long day in the city. He chose to make serving drinks and refreshments a joy and gained pleasure in making passengers smile. He was providing a valuable service and had a positive attitude toward his work and the customers he served.
To decide on our career and our attitude to it, can often be the changing factor as to whether we experience job satisfaction. Who knows, maybe in his previous job he had been a commuter and understood the pressures of a face paced life and wanted to make a difference!

Working with individuals who are re-evaluating their life and career direction is an absolute pleasure. I’ll never forget the senior journalist who had gained his degree and had been working as a news reporter for many years. He came to me for guidance; to gain some perspective and plan for his working life. His angst? He was creative and wanted to write science fiction but never had the time for his true passion, as he was always meeting deadlines on factual journalistic pieces. When he uncovered his new path, he beamed at me, I was slightly concerned, but he was thrilled. ‘I’ve always wanted to be a bus driver since I was a little boy,’ he said ‘this new direction allows me to spend my days thinking of what I will write at night and forge a hobby which I hope one day will be a career.’ I ought to look him up as this was many years ago. Then there was the lady who had fallen into being an administrator after leaving school in the sixties, having been told she wouldn’t amount to much. She desperately wanted to do something else, but sadly commented, ‘I haven’t trained to do anything else, and I’m in my late fifties, what can I possibly do now?’ Happily, she is now project manager for a large stately home and visitor attraction. This client loves meeting new people every day, being ‘out and about’ yet using her organisational ability to ensure everything runs smoothly.

When individuals assess their career path, sometimes they are that ‘square peg in a round hole’ but for others they find that it is not the position but the environment they dislike and by changing their sphere of search they find their ideal job. Maybe an unrelenting boss, a ‘bitchy office’, an uncertainty or a busy or claustrophobic environment affect how you perceive work.

Consider this: If no job is beneath you and no aspiration unrealistic, what would you choose to do?

Surely if YOU enjoy it isn’t that all that matters?

You may be forgiven for thinking the train experience was unique, but any job can be YOUR vocation. Don’t let snobbery, qualifications, location, time or age define your purpose, and certainly never let others affect the career choices you make.

Enthusiasm is infectious, no one is forcing you to do your current role. So, Change your circumstances, be true to yourself and make your life better today;
Your family, health and future depend on it.