10 alternatives to a bank loan for growing businesses

The economy is returning to growth but there are concerns that growing businesses cannot access the finance they need to maintain pace.

While banks remain the main source of funding for Britain's businesses, for many this is far from the best solution as they will not be successful or because they won't get the funding on terms which are favourable to them.

Here are ten alternatives to a simple business loan which could help you grow your company.

Debt finance
The type of funding you pursue will obviously depend heavily on the the status of your business, its eligibility, how much you can afford to take on, and whether you're willing to give away equity.

If you want to retain sole ownership then debt funding is likely to make the most sense.

1. ABL
Asset-based lending (ABL) allows you to borrow against the value of your assets, whether that's your premises, stock, machinery or unpaid invoices.

ABL has struggled a little due to perceptions that it is a last resort for struggling companies who need to turn assets into working capital or risk going bust. But attitudes are changing and for many businesses the opportunity to turn invoices into working capital is a useful way to boost growth.

ABL is available from some banks, and other traditional providers include Close Brothers, GE Capital and Investec.

2. Invoice trading 
Not entirely distinct from ABL, invoice trading is a new form of invoice finance which connects you directly with investors through an online portal. Providers say this option is more flexible and transparent than traditional invoice finance, which can often tie you into long commitments.

The two leading players in the UK market are MarketInvoice and Platform Black.

3. P2P loans
Sometimes referred to as “debt crowdfunding”, P2P lending allows savers to lend directly to businesses in return for interest. All you have to do is create a pitch and provide some key pieces of business data and then your platform assigns you a risk band before passing the pitch on to investors.

The benefits of this form of funding tend to be speed and convenience compared to applying for a bank loan, not to mention a higher likelihood of approval.

Funding Circle is by far the market leader in P2P business lending in the UK, although other companies like Zopa, which has focused more on consumers up to this point, are following in its footsteps.

4. Unsecured digital lenders
In recent years a number of business-orientated unsecured lenders have popped up, which allow you to borrow flexibly at very short notice. Companies like Ezbob and Everline use complex algorithms to deliver a lending decision which is much quicker and, they say, more accurate than can be calculated by banks. Money can typically be in your account on the same day.

This convenience comes at a cost though, with high interest rates compared to banks. The maximum you can borrow will typically be around £50,000 so it's mainly useful for relatively small companies or specific short-term projects.

5. Bonds
Bonds have been identified as a key growth area for business finance.

These effectively act as an IOU offering investors, who tend to be individuals rather than institutions, a fixed return on the value of the bond, followed by repayment of the full amount some years later. They are typically used by fast-growing businesses who are confident of future performance.

Retail bonds are those listed on the London Stock Exchange's Order Book for Retail Bonds, and can be freely traded by investors. The amounts raised through this method tend to be particularly large – from £25m to £300m so they are suitable for successful, well-established businesses with a high growth trajectory.

Some businesses go down the route of issuing their own mini-bonds, which are non-transferable (so investors are tied in for the whole period). Hotel Chocolat, John Lewis and King of Shaves have all raised money through this method. Crowdcube, an equity crowdfunding platform, has also launched a service allowing growing businesses to raise money through mini-bonds.

Equity finance
Equity finance is suitable for those entrepreneurs willing to give up a stake in their business to investors. While this might seem unattractive to those wanting to retain a firm grip on their business, investors can also act as mentors who help you take your business in the right direction.

6. Venture capital
Venture capital (VC) funds invest in early-stage businesses with high growth potential. Though they are generally willing to take on greater risks than other investors, they will need to see strong potential for growth in your business, and that you are a capable leader.

VC funding tends to be invested over a number of years and investors will expect you to do all you can to develop a solid return for them, so you will need to be ready to really push for growth.

There are dozens of VC funds in the UK, which has the largest VC market in Europe, but notable ones include Index Ventures and Balderton Capital.

Related: How to pitch your business to VC investors.

7. Private equity
In contrast to VC funds, private equity funds tend to go after larger companies with a well-established historical track record. These take money from institutional investors and buy equity in under-performing private companies which have strong potential to be turned around.

The investment is usually over a long-term cycle and as with VC funds investors will be seeking a strong return so will generally work very closely with management teams to achieve growth. For some entrepreneurs private equity investors can be too much of an intrusion, but others value the discipline and professionalism they can bring to a growing business.

8. Equity crowdfunding
Equity crowdfunding harnesses the money of dozens if not hundreds or thousands of supporters who buy small amounts of equity in your business.

As well as raising the money you need, this has the added bonus of bringing on your loyal customers as an extra set of voices in your organisation.

Many companies choose to use crowdfunding platforms such as Crowdcube or Seedrs. Others have done it independently, with craft beer company Brewdog's “Equity for Punks” scheme perhaps being the most high-profile example.

Others
9. Pension-led funding
If you've got a decent amount of cash sitting in your pension pot then it could be possible to turn this into business funding.

Clifton Asset Management is a leading provider of this form of finance. It allows customers to invest their own pension fund in their business, either by lending money against the value of its IP or buying your company's assets and leasing them back at a commercial rate.

More on how this works here.

10. Autofinancing
It's worth having a really good think about whether you really need funding at all. Even if you think you will need growth finance in the future, if it's possible to keep costs low and margins high then you might be better off waiting.

Not taking on debt has the obvious advantage of minimising costs later down the line, and not giving up equity means you can have a greater control over your business.

If you can prove the success of your model without needing to take on external funding then you could be in a better position later down the line; both because it demonstrates your prowess to investors and also means the stake that you hold will be worth more as a proportion of the company's total value.

Autofinancing can be a difficult concept to get your head around and it certainly won't work for all companies but it can work. For instance German consumer appliance giant Miele, which now turns over £2.5bn each year, has been self-funded throughout almost all of its 100-year history.

Click here to read the original article: "10 alternatives to a bank loan for growing businesses"

Self-employed work longer hours but earn less

The recession ramped up the number of self-employed in the UK - but a new report has found they work harder for less than their employed counterparts.

Office for National Statistics (ONS) stats today show that the self-employed accounted for two thirds of the 1.1.m jobs created since 2008.

These were primarily in 'professional, scientific and technical activities,' like consultancy and accounting.

Londoners were the most likely to be self-employed, at 17.3 per cent, compared to 16.6 per cent in the South West and 10.8 per cent in the North East.

The research found many self-employed workers were working longer hours for less pay. 

More than 13 per cent of self-employed clocked up working weeks of 60 hours or more - when just 4 per cent of employees did. A third of self-employed people worked 35 hours a week, compared with 23 per cent of employees.

Despite these longer hours, self-employed workers saw their income fall. Their real wage, after tax, fell by more than 20 per cent since 2008.

However this data included failed and failing businesses - which reported a negative income in the 2012/13, distorting the data.

The self-employed population was also on average older than the employed: 43 per cent are aged 50 or over, with an average age of 47 - seven years older than that of employees.

Jamie Jenkins, a labour market analyst at the ONS, said: "More people are now working beyond the normal retirement age of 65," he said. "A lot of people who set up businesses did so in the 1980s, when there was a big entrepreneurial push.

"While we only have anecdotal evidence as to why people are not leaving self employment, many people I ask say they have been self employed for over 20 years or more," as reported in the Telegraph. 

A report last week found that Britain is now the self-employment 'capital' of western Europe with the number growing by more than 1.5m in the last 13 years, and accounts fro 15 per cent of the labour force in the UK. The highest in Europe is Greece, 32 per cent.

Click here to read original article 'Self-employed work longer hours but earn less'

Should we be worried about the self-employment boom?

The UK is becoming the 'self-employment capital' of western Europe, but is it a sign of slack in the economy?

Self-employment is booming in the UK, at such a rate that our workforce could soon look decidedly southern European. 

It climbed 8% year-on-year in the first quarter of 2014 – a jump only shy of those in Slovenia, Cyprus, Bulgaria and Lithuania.

Self-employed workers now make up 14% of the UK’s workforce, according to the research by think tank IPPR, ahead of 10% in France, 11% in Germany and all of the Baltic and Nordic nations.

Britain still pales in comparison to the beleaguered economies of southern Europe, where self-employment is 17% in Spain and Portugal, 23% in Italy and a staggering 32% in Greece. 

But these latest figures will stoke the debate over just how secure the economic recovery is, despite unemployment tumbling to 6.5% and stonking GDP growth.

Around a third of the rise in employment since 2010 has come from self-employment, leading many economists to point the finger as productivity has stagnated and wages still lag inflation. 

The Resolution Foundation, a think tank, estimates the self-employed earn 40% less than the employed.

But there hasn’t been any increase in the number of people self-employed for less than six months since 2012, the Office for National Statistics said last month. 

Much of the increase came from people delaying retirement, with more than half self-employed workers having gone it alone for at least a decade.

If wages really start to recover, rather than edging up in fits and starts behind inflation, then self-employment won’t seem like such a bad idea after all. 

But if that elusive ‘slack’ in the economy stays stubbornly put, the number of people working for themselves, but not at their full potential, should start to jab policy makers into action.

Click here to view original article 'Should we be worried about the self-employment boom?'

Health and safety law exemption proposed for the self employed

Stephen Thomas, safety technical consultant at Croner, discusses the ramifications of a proposal to exempt certain self-employed people from health and safety red tape.

Between July 7th and August 31st 2014 the Health and Safety Executive (HSE) has sought views on their proposal to exempt certain self-employed persons from Section 3(2) of the Health & Safety at Work etc. Act 1974 (HSWA).

The proposal arose from the government-commissioned 2011 Löfstedt Report 'Reclaiming health and safety for all', which recommended that self-employed persons be exempt from health and safety law where they pose no potential risk of harm to others through their work activity. If introduced up to 1 million people could be affected.

The current position 
The Great Britain regulatory framework for health and safety, in particular section 3(2) of HSWA, places general duties on everyone 'at work' including the self-employed. Section 3(2) states: 

'It shall be the duty of every self-employed person to conduct his undertaking in such a way as to ensure, so far as is reasonably practicable, that he and other persons (not being his employees) who may be affected thereby are not thereby exposed to risks to their health and safety'. 

Section 53 of HSWA gives a broad definition of a self-employed person. It states that a 'self-employed person means an individual who works for gain or reward otherwise than under a contract of employment, whether or not he himself employs others'. There is no proposal to amend this definition.

The proposed change 
Section 3(2) of HSWA may be amended in order to exempt self-employed persons from the general duty in respect of themselves and other persons (not being their employees), except those undertaking activities on a prescribed list. The list includes:

• Any agricultural activity
• Landscaping including the creation, maintenance and management of parks, gardens,
• Construction work
• Electricity
• Equipment and plant. Examination, maintenance and testing (as prescribed)
• Health & social care
• Waste Management

Reaction and concerns
The reaction among business organisations such as the Federation of Small Businesses, the British Chamber of Commerce and the Institute of Directors has been positive, with a general feeling that it will enable small, self-run businesses to thrive without the additional burden of health and safety legislation.

Safety bodies such as the Institution of Occupational Safety and Health, the Trades Union Congress and Royal Society for the Prevention of Accidents greeted the proposal with significantly less enthusiasm, believing that it could lead to a reduction in standards and a possible increase in injuries and work related ill-health and that the exemption will be difficult to apply correctly.

There are also other concerns as to how certain organisations such as insurance companies and contractor approval schemes will respond to the change. Furthermore many companies may simply choose not to engage self-employed persons to carry out work on either their behalf or on their premises due to the belief that these persons could not be prosecuted and therefore they could find themselves becoming liable.

What next?
The HSE will assess the costs and benefits of the proposed changes as set out in the impact assessment in the consultation document, and will then decide on how best to take the proposals forward, based on the consultation responses.

Click here to read the original article: "Health and safety law exemption proposed for the self employed"

What types of limited company are there?

When most people refer to a ‘company’, they usually mean a private limited company which has shareholders. However, there are several other types of company which all serve a different purpose.

Private Company, Limited by Shares

The vast majority of companies in UK are private companies, limited by shares. A limited company has ‘share capital’, which is owned by its shareholders. The liability of each shareholders is limited to any unpaid amount owing on their shares. Since the implementation of the Companies Act 2006, you can be the sole director of a limited company, and the office of company secretary is an optional one.

Private Company, Limited by Guarantee

Private companies, limited by guarantee, on the other hand, have members who act as guarantors, rather than shareholders. The only liability members have is the amount they guaranteed to the company in the event that it was wound up. This type of structure is commonly used by charities, voluntary groups,  and other non-profit organisations.

Members of this type of company benefit from limited liability – in most cases liability is limited to a mere £1.

One person can set up this type of company, and as with the most commonly formed company type, the office of company secretary is an optional post.

Public Limited Companies

Public Limited Companies (PLCs) are larger organisations. Unlike the other types of limited company, they may offer their shares to members of the public, and be listed on the stock exchange. A PLC must have two directors or more, and the company secretary must be qualified.

In many cases, standard limited companies are converted into PLCs at a later date, when the business need arises.

PLCs are subject to much more rigorous accounting scrutiny than their smaller counterparts.

Private Unlimited Company

A Private Unlimited Company is the final type of company, and not commonly used. These entities may or may not have a share capital, and there is no limited to the liability of their members.

Other types of Business Structure

Alongside the incorporation route, the majority of small business people operate as sole traders, or set up partnerships if they want to carry on a trade with other people.

These types of structure are simple to set up, and don’t have the same levels of administration and accountability as limited companies, however sole traders are liable for any debts their businesses incur.

The Limited Liability Partnership (LLP) route is often used by professional businesses such as law firms, where members want the combine the benefits of self employment with the protection that incorporation affords.

To be sure that you select the right type of business structure for you, we would always recommend talking to an accountant first.

Click here to read the original article: "What types of limited company are there?"

An entrepreneur's essential guide to keeping the cash flowing

Managing your business’ cash resources and ensuring you have enough to meet your needs is absolutely critical. Clive Lewis FCA, head of enterprise at ICAEW, offers his advice on the importance of managing your cashflow.

ICAEW is a supporter of BusinessZone's small business competition The Pitch 2014. 

The SME Finance Monitor, a quarterly survey of 5,000 smaller businesses, reveals that 64% of businesses have not used external debt in the last five years.

Many businesspeople must wonder how they can manage without borrowing. The answer is likely to be due to good cashflow management.

Why is cashflow important?

Firstly, why is cashflow important? Isn’t profitability more important? Well, there is an old maxim that no business ever collapsed because of lack of profitability but many have gone under because they lacked cash. Having cash allows a business to operate. 

Managing your cash resources and making sure you have enough to meet your needs, (e.g. paying wages, buying supplies and meeting your personal financial requirements), is absolutely critical.  

Starting up: Things soon get complicated

Most businesses start with a small amount of cash from the proprietor. As they build up the business they leave sufficient funds to cover the bills. Problems often start when they offer credit to customers or buy on credit, or they take on an employee or sub-contractor who requires regular payment.  Suddenly cashflow, payment from customers and payment of supplies bought on credit, becomes an issue. 

Get a grip: Keep up-to-date records

It’s at this point that business people need to establish good habits. These start by making sure that the business accurately and regularly records details of trading transactions. This might be in a manual cashbook, on a computer using a spreadsheet or accounting software. 

The accounting records should allow the business to instantly find out the business bank balance as well as what monies are owed from customers and the amounts unpaid to suppliers. 

How to prepare a cashflow forecast

Whatever system is used, it should provide the basis for preparation of a cashflow forecast. You start with what bills are already owed or owing, and known commitments of weekly or monthly expenses, such as payroll, rent and leasing or hire purchase payments. 

You then build in predictions of receipts and payments from future sales, purchases, expenses and other payments over the forecast period. 

Cashflow forecasts are a key tool in the management toolkit. They can highlight when the business might run low on cash and can be the basis for an action plan to remedy the situation before it happens.  

Managing cashflow

Receipts from customers

There are some vital steps that all businesses should take to maximise receipts from customers:

For big value sales on credit, check the customer’s credit rating 

Agree the terms of payment with the customer before starting work 

Invoice as soon as the goods have reached the customer, or service rendered 

Regularly progress payment with the customer, starting after a few days 

If payment is not received within the agreed period, progress payment higher up the customer’s management and consider how quickly you stop supplies or services 

If still unpaid, use solicitors’ letters and threaten court proceedings (although would you be throwing good money after bad?) 

Payments to suppliers

Agree payments terns with suppliers at the start of trading with them and always try to stick to them 

If you think it may not be possible to pay, contact the suppliers concerned and ask to delay payment. 

Provided you consistently pay on time, and requests to defer payment are rare, they will probably agree 

Letting suppliers down will reflect in your credit rating which may come back to affect future supplies.   

Managing cashflow is in part a mirror image of the business’ investment in working capital. 

Generally, the higher the value of stock or work-in-progress, or monies owed by debtors, the greater the difficulty in keeping control of cashflow. 
So maintaining a tight grip on stocks and debtors should free up cash for use elsewhere in the business. 

Seven tips for managing cashflow

1. Know your current cash situation
You should always know how much cash the business has to draw upon and what the position will be over the next three months.

2. Regularly prepare and update cashflow forecasts
You must be able to predict the effect of a lost sale or a bad debt on the cash position. Regular updates of cash flow forecasts are vital.

3. Raise awareness about cash
Make it clear to colleagues how important it is knowing when customers are expected to pay, and go through aged debtor schedules to ensure delinquent customers are chased up. Assign actions to staff and check they happen.

4. Think about your credit rating
Paying suppliers when agreed can help improve your credit rating. Preparing monthly management accounts and sharing the information with your bank or the credit reference agencies might also help your credit scor

5. Consider factoring or invoice discounting
Factoring or invoice discounting can offer financing of up to 90% of the value of a sales invoice. This is likely to be much more than a bank will allow on an overdraft secured on your sales invoices. Invoice finance requires a disciplined approach to credit checking and only business-to-business invoices can be covered. 

6. A bank loan or overdraft
If you decide on a bank loan or overdraft, you may be asked for personal guarantees or asked for security. Be aware of the interest rate and charges to be paid as well as any covenants with the finance. 

7. Capital expenditure
If the new asset is essential to the business, think about deferring payment by hire purchase, leasing, or hiring. Also consider the tax perspective. If you have been making losses, leasing or hiring might be preferable.

If you need help with your business plan, or simply want to talk over the financial information and forecasts, a free initial discussion with an ICAEW Business Advice Service (BAS) firm is a good place to start.

Click here to read original article 'An entrepreneur's essential guide to keeping the cash flowing'

Surfing the internet might be good for employee productivity

While sometimes feel guilty about our surfing habits at work, but a new study suggests we might surf as a way to relax and recharge when focusing on the task becomes difficult.

The study, published in the Human Performance journal, studied how well participants's could focus on tasks which required up to 40 minutes of concentration.

Importantly, they were looking at what they did beside the actual task, whether it was getting distracted or nothing, they had to simply try to focus for all that time.


They found if participants were surfing online - like looking at Youtube videos or on social media like Facebook - they actually were able to concentrate for longer. 

Our ability to concentrate on any one task is actually pretty low: without a break, we can go for from about five to 15 minutes, after which we start to lose focus. At which point, we're liable get distracted by anything little thing that pops into our periphery, like an email or notification.

We then so often develop guilty narratives about how easily we get distracted, by the ubiquitous cat gif or latest Facebook status. We say things like, "I just can't help myself!" But it may be our brain reaching out for a much needed refresher.

This goes someway to defeating the received wisdom that long hours on the same task are the best ways to work (what our parents called, 'hard graft'). In fact it seems from this research that we're better off working on smaller tasks, for brief periods, and switching between them. Or as found in the study, giving ourselves 5 minute breaks by surfing a little the internet, going for a walk or reading articles. 

Of course, it's important these tasks are more about passive scanning than actively taking up information: in which case, we're just further taxing our aching brain.

New insights like these advise companies not to ban websites like Facebook - which some businesses have taken up to prevent distractions - which create Draconian environments to keep office workers on task.

In fact, the study reported that positive or even neutral environments, which they tested by something sad and happy pictures, are far better for concentration and willingness to work than negative. A crackdown on internet access can both prevent workers from taking important breaks and create an oppressive, anti-productive environment.

The moral of the story is: do what makes you feel good (within reason): tasks that may seem vacuous and time-wasting may prove important. Managers should learn to be less Draconian and recognise that a happy workforce is a productive one, a fact which often goes ignored.

Click here to read the original article 'Surfing the internet might be good for employee productivity'

Firms tangled up in red tape: 73 per cent of visits by taxman fail to uncover errors

The taxman has been accused of wasting the time and resources of small companies after a sharp jump in the number facing detailed checks on their records by tax officials and a decrease in the number found to have significant errors.

The number of firms forced to undergo a controversial ‘business record check’ – where the taxman visits a company and examines accounts and employment records in close detail – has leapt by a third.

The system was introduced in April 2011, but was put on hold in February of the following year after numerous complaints from accountants and small businesses.

The checks were reintroduced in November 2012, but Revenue & Customs had to abandon ambitious targets to inspect tens of thousands of companies because of a lack of manpower. However, figures show the rate of inspections is still growing.

Just over 5,500 companies underwent the checks in the year to April 2014 – up from 3,431 in the ten months between April 2011 and February 2012.

But almost three quarters of the companies investigated were found to have no significant errors or anomalies in their paperwork.

The figures were compiled by PFP, which insures companies against the costs involved in a tax inspection, and are based on details provided by the Revenue.

The 73 per cent found to have no significant errors was up from 64 per cent in the previous year leading PFP to suggest that the increasing number of visits came with a ‘relatively low hit rate’.

Kevin Igoe, managing director at PFP, said: ‘These business checks are a worry for small businesses because they don’t have time to sit in on the Revenue as it undertakes the checks. It is time that managers will think is better spent elsewhere.’

Companies found to have faults in their record-keeping can be fined £3,000 on top of any tax payments due. PFP estimates that the Revenue will raise £49 million from fines and unpaid tax as a result of business record checks.

A spokesman for HMRC said the checking system had been subject to revisions aimed at filtering out low-risk companies and preventing them from being exposed to the process.

He added: ‘From November 2013, the BRC programme was scaled back to better target those at risk of having inadequate records. It will allow us to concentrate on those who need our help and reduce the burden on those customers who are keeping adequate records.’

Click here to read the original article: "Firms tangled up in red tape: 73 per cent of visits by taxman fail to uncover errors"

Young people should think about starting their own business instead of university, says employment minister

School leavers should think about starting their own business instead of just planning to go to university, the employment minister has said.

Esther McVey said that for many teenagers, being their own boss would be better than embarking on a career with a large firm.

She said she wanted to encourage people who have a 'seed' of an idea to pursue it, instead of feeling pressured to follow friends or family into taking a degree.

Miss McVey, who was promoted last week in the Cabinet reshuffle, said the choices made by people to become apprentices or self-employed are 'equal and good and worthwhile' when compared to those who choose to go to university.

Ms McVey told the Daily Telegraph that the Conservative party should be supporting people no matter which route they take to employment.

'That is what we should be doing, liberating everyone's potential, whether it's a self-made individual, whether it's someone taking the university route, whether it's the apprenticeship route.

'They are all equal and good and worthwhile. To think that we are all the same and going to follow the same journey, that is wrong.'

The minister, whose father was self-employed, said a significant number of those who have claimed a New Enterprise Allowance supporting people on benefits who want to start a new business are aged between 18 and 24.

In an interview with MailOnline last week, she urged young people to get their first job 'as soon as possible'. 
She argues that whether working in a florist, funeral directors or grocers, a first job can provide money, but also friends, skills and insight into jobs they never knew existed.

Some people might try out a desk job or work in a bank on a Saturday but decide: ‘Actually I don’t like that at all I’m outdoors and people have ended up being gardeners or chartered surveyors.

‘Or sometimes you say what drives my desire to learn is actually a real hands-on practical skill, looking at engineering, manufacturing.

‘It’s that creation of something has then forced their desire to then do more in maths, physics or chemistry which they would not otherwise have had.

‘They said they sat in the school classroom and it just never came to life learning the periodic table but do you know now they are on a factory floor and seeing what they can create.’

Figures last week showed more than 30 million people are in a job, an increase of almost one million over the past year, the best figures since records began in 1971, while unemployment has fallen by 121,000 to 2.12 million, the lowest since the end of 2009.

Other figures from the Office for National Statistics showed that the number of people claiming Jobseeker's Allowance fell last month, the 20th consecutive monthly fall and the lowest total since 2008.

More than 4.5 million people were self-employed, the highest since records began in 1992, after an increase of 404,000 over the past year.

Click here to read the original article: "Young people should think about starting their own business instead of university, says employment minister"

Britain’s biggest business contest seeks entrepreneurs with a social mission

One of the UK’s longest running business competitions is looking to award entrepreneurs out to change the world with a special package of business support, fund raising and mentoring.

The Pitch, presented by BusinessZone.co.uk and UK Business Forums in association with AVG, has helped thousands of small business owners since it was launched in 2008.

Serial social entrepreneur Karen Darby, who recently founded crowdfunding platform CrowdMission.com, has supported the competition since 2009 and in 2014, she is contributing a special package of support to up to five finalists running a business with a social mission at its core. 

The prize includes crowdfunding, sales, marketing and PR support, business mentoring with Karen, legal advice on IP and patents and a free, professionally filmed pitch video. 

Darby, who has 30 years business experience, was inspired to offer the prize after spending the last year mentoring Arthur Kay, co-founder of Bio Bean and overall winner of The Pitch 2013. 

Kay’s company turns old coffee grounds into bio diesel and has achieved great success since winning The Pitch last October.

Entrepreneurs interested in winning the prize need to enter The Pitch 2014 by 13 July at www.thepitchuk.com. 

Arthur Kay comments: “Karen has a phenomenal mentoring style. She has mentored me and my business partner on both a personal level in terms of what’s in it for us, and in terms of the business itself. 

“Her knowledge of how to set up a business, and how to sell into institutions and form commercial partnerships has been completely invaluable for us.” 

Dan Martin, editor of BusinessZone.co.uk and founder of The Pitch, adds: “Karen Darby has offered amazing support of The Pitch since 2009 so I'm absolutely delighted that she is offering this special prize to companies with a social focus.

“Many of our entrants over the years have run businesses that aren't just about profit, but also about making the world a better place. It’s great that we will be rewarding them this year. I urge anyone running a company that fulfils the criteria to get involved.”

To qualify for the prize, entrepreneurs must be running a company that has been trading for less than three years, is limited by shares (or prepared to incorporate as one) and looking to raise between £10,000 and £500,000 equity finance.

The Pitch 2014 is also supported by ICAEW, Constant Contact, .uk and Nokia. 

Entrepreneurs who don’t fit the social mission criteria can still apply for The Pitch 2014 and compete to win the general prize package worth thousands of pounds.

Click here to read the original article: "Britain’s biggest business contest seeks entrepreneurs with a social mission"

Spend July shopping with the small independents, urges campaign

Consumers are being urged to support their local economy by spending money with small businesses to mark the fourth annual Independent Retailer Month.

Independent Retailer Month is a campaign that runs throughout July and aims to raise awareness of thousands of local businesses and increase footfall into town and village centres, thereby helping retailers to stay open for business and to improve collaboration between retailers.

Research carried out by the Centre for Local Economic Strategies (CLES) for the Federation of Small Businesses (FSB) found that for every £1 spent locally, 50-70p recirculates back into the local economy. In contrast, only 5p of every £1 spent out of town finds its way back to the local community.

“Most people don’t realise how valuable their custom is to their local, independent businesses,” said Clare Rayner, the Retail Champion and founder of Independent Retailer Month. “We need these customers to understand how their hard-earned cash can boost their local economy, depending on where they choose to spend it.

“Every pound spent with independent retailers in your local town or village is worth 10 times more to your community than if you spent it elsewhere. That’s what Independent Retailer Month is all about: we want consumers to re-engage with their local businesses and discover the benefits of shopping closer to home.”

Click here to read the original article: "Spend July shopping with the small independents, urges campaign"

Entertainment expenses for limited companies

With the party season upon us once again, we look at the tax treatment of entertaining clients and employees – including the rules governing Christmas party expenses.

In most cases, the cost of entertaining is not tax-deductible, and VAT is not recoverable on expenditure.

However, the rules are complex (as ever), and VAT can be reclaimed in certain circumstances.

Staff Parties

Your limited company can pay for an annual event, and there are no personal tax implications if the total does not exceed £150 per head.  This doesn't need to be one event either, just ‘annual’.  So you could have a Christmas Party and a Summer BBQ, and both would be allowable for Corporation Tax purposes provided the total of both doesn't exceed the £150 per head limit (if it goes £1 over then the whole amount is a benefit in kind, so be careful!).  The costs can include food, drink, tickets to events, accommodation and a taxi fare home.

If you’re registered under the flat rate scheme then obviously you can’t reclaim any VAT, but those who are standard rated can reclaim to the extent the costs are applicable to staff.  If you have 2 staff and 2 guests, you could therefore reclaim 50% of the VAT.

As with everything when it comes to HMRC, a common sense approach is advised.  If you run a limited company and are the sole employee/director, having a Christmas party where you invite 10 guests (who happen to be your family members or friends) may be seen as uncommercial, and therefore has the potential to be disallowed as it’s not ‘for business purposes’.

Client Entertainment

Your company can pay for entertaining of clients or potential clients, but this will not be an allowable deduction for Corporation Tax purposes.  It’s still worth paying from the company though, as it saves you the income tax you would otherwise pay on withdrawing the funds to pay the costs personally.

It makes no difference if the person being entertained is an existing customer, a potential customer, or any other person who is not an employee.  The VAT element of entertaining can only be claimed when it relates to staff, as detailed above.  Which leads to a further word of caution – if the staff member is acting as a host, and the purpose of the cost was to entertain the client, then no VAT can be reclaimed at all.

Personal Entertainment

Your company can pay the costs associated with your own entertainment, but it will be a benefit in kind, thereby leaving you no better off tax-wise than if you’d paid the cost yourself!

Click here to read the original article: "Entertainment expenses for limited companies"

Welcome to our new Area Manager David Dar

Dotty Directory is delighted to welcome David Dar as our new Area Manager for Southend responsible for sales and marketing of Southend Connection.

David has 30 years experience working in various sectors such as business development and lettings. We are sure he will prove to be a very significant addition to the Dotty Directory team.

Businesses advertising on Southend Connection will be linked to over 150 other websites and dozens of Facebook pages throughout the UK, giving both local and national exposure for one small annual cost. It costs just £25 plus vat A YEAR to advertise on Southend Connection.

David will be introducing Southend businesses to the unique marketing opportunity offered by Dotty Directory. If you would like more information please call David on 07747 758950 or our head office on 01824 719005 or email us at support@dottydirectory.com.

Welcome to our new Area Manager Robert Bonfield

Dotty Directory is delighted to welcome Robert Bonfield as our new Area Manager for Hoddesdon responsible for sales and marketing of Hoddesdon Connection.

Robert has a lot of experience and a proven track record in sales, marketing and customer service. We believe he will very valuable to businesses in Hoddesdon and very successful with Dotty Directory.

Businesses advertising on Hoddesdon Connection will be linked to over 150 other websites and dozens of Facebook pages throughout the UK, giving both local and national exposure for one small annual cost. It costs just £25 plus vat A YEAR to advertise on Hoddesdon Connection.

Robert will be introducing Hoddesdon businesses to the unique marketing opportunity offered by Dotty Directory. If you would like more information please call Robert on 07949 829 314 or our head office on 01824 719005 or email us at support@dottydirectory.com.

Welcome to our new Area Manager Jimmy Walker

Dotty Directory is delighted to welcome Jimmy Walker as our new Area Manager for Bridgwater responsible for sales and marketing of Bridgwater Connection.

Jimmy has a strong background in sales and IT, he is also a qualified football coach and we are sure he will be very successful with Dotty Directory.

Businesses advertising on Bridgwater Connection will be linked to over 150 other websites and dozens of Facebook pages throughout the UK, giving both local and national exposure for one small annual cost. It costs just £25 plus vat A YEAR to advertise on Bridgwater Connection.

Jimmy will be introducing Bridgwater businesses to the unique marketing opportunity offered by Dotty Directory. If you would like more information please call Jimmy on 07500 887289 or our head office on 01824 719005 or email us at support@dottydirectory.com.