There’s no place like home for business

It’s predicted that more than half the UK’s working population will work from home by 2010. The demise of manufacturing, increase in service industries and wider availability of tools that enable us to operate ‘virtually’ have all contributed to the situation. It is now normal for large corporations to operate flexible work practices allowing employees to connect seamlessly into the corporate IT network from their lounge and to hot desk when they need to visit the work premises. But it is particularly amongst small businesses that a home-office base has become the obvious solution.

There are clear benefits – no premises to pay for and no commute for instance – but there are several aspects that are worth considering to ensure it becomes a successful business proposition.

Apart from saving premises rental, some of the household costs might be considered legitimate business expenses for tax purposes. A word of caution though. Be sure that you apportion these realistically and avoid, if possible, claiming for sole use of a room or area of the house for business purposes as this could impact on household insurance, incur business rates and even have Capital Gains Tax implications. Your accountant can help you assess what’s reasonable.

Whilst financial benefits are not too difficult to imagine, the impacts on you and the rest of your household can be more difficult to foresee. How will the business encroach on the rest of the house? Will there be paperwork left lying around everywhere and how will the family feel about it? Storing business documents digitally wherever possible could help. It will also make information retrieval easier.

Will you be able to work effectively with the children around? Agree some ground rules if you will often work with others in the house. Don’t forget to allow time and space for them though. Your business may be high on your priorities but not everyone may have the same passion. Perhaps the opposite applies – hours of uninterrupted productivity whilst the others are out at work. Whilst this might seem attractive if you are used to working in a busy open plan office, there are consequences of working alone for long periods such as a lack of stimulation and motivation. Vary your day by planning in time for exercise, a change of activity or even working elsewhere in the house. Good time management tips can be found on websites like and

Finally, don’t forget that, generally, we are sociable by nature and need interaction with other people. If your business doesn’t naturally lend itself to that on a regular basis, then you might have to go and find it. Networking groups are a great way to meet like-minded folk as well as a good way to find out more about the local business scene and, of course, maybe pick up custom! There are more than a dozen groups active in Harlow and surrounding area.

Running the business from home is the perfect choice for many small enterprises – you just need to work at it!

First published in 2008

Make your marketing hit the target

‘We need to do some marketing’ is a phrase often heard in small businesses when sales are not forthcoming or the competition seems particularly active. In fact what many people refer to as marketing is really some form of promotion, such as advertising or producing a brochure.

Marketing is more than that. It’s the whole process of understanding who your customers are, what their needs are and how you can satisfy those needs with your product or service. Promotion is about getting your customer’s attention and positioning your product in a way that they might find enticing enough to buy. It’s a part of the overall marketing plan of course but it comes as a consequence of doing some research into your target market and really understanding what your business is about.

A technicality some might say, surely the main thing is to let people know you’re there and make them an offer they can’t refuse. Well not really, promotion without first understanding your target market, who your competitors are and what your customers really value, can lead to valuable resources being devoted to promotional activities that have no realistic hope of bearing fruit. It’s the scattergun approach.

The foundation to any business idea is to make sure your research is sound by finding out as much as you can about your market and who else is in it using the internet, newspaper reports, magazines and trying to get as much information as possible from people who might buy from you.

As well as understanding your market it’s vital to decide what your business is about, and also what it’s not. Unless you aspire to be Del Boy’s successor dealing in ‘this ‘n’ that’ your business will need to follow the example of all successful enterprises by concentrating on a core purpose that builds on your strengths and fills a clear gap in the market.

To help you get better focussed, try imagining yourself as your customer. What sort of person or organisation would want your product or service and what might be important to you if you were them – it’s likely to be more than just the product features and the price. Qualities such as customer service, responsiveness, honesty, trustworthiness, ethics and shared values usually play a part in helping us decide who gets our hard-earned cash. Reflect the things that are likely to be important to your target in your promotional material and they will sense that you are talking to them.

The world’s big brands devote substantial amounts of money to their marketing process because they recognise that the return is well worth the investment in time and money, but the principles of marketing are relevant to any business, from a single self-employed person upwards. It’s just the scale that differs.

So, ‘We need to do some marketing’ might become ‘What does our marketing tell us we need to do to become more profitable?’

First published in 2008

Keep the money flowing – being profitable is not enough!

Speak to any banker, accountant, market analyst or business adviser about why businesses fail and most often cited as the prime cause is poor cash flow management. On the face of it making sure there’s always sufficient money available to keep things afloat seems a simple enough concept, so why is it such a common problem and what can be done to make sure your business doesn’t join the list of failed enterprises?
The answer to the first question is probably that it’s due to a number of things such as concentrating on profitability and the day-to-day operations of the business or being lulled into a false sense of security by the size of the bank balance at any one time without considering how many commitments it needs to fund and for how long. In short it’s only human nature to be more interested in what motivated us to start our business than managing cash flow.  But manage it we must because the sad fact is that many very profitable businesses have gone bust because the owner didn’t pay attention to it. The good news is that, with a bit of forecasting and an organised approach, cash flow fatalities can be avoided. Here are ten tips to help you keep on top of the money:

Prepare and maintain a forecast for the coming year predicting the amount and source of your sales and, importantly, when the money will likely be in your account. Although it might seem impossible to foresee how customers will behave, an analysis of last year’s receipts will help make a forecast which can be reviewed and revised on a monthly basis.

Invoice your customers promptly and follow up as soon as the terms of your payment period are exceeded. Recent research found that 59% of SME’s suffer late payment problems – with 33% saying that the failure of clients to pay on time actually risks the survival of their businesses.

  1. Account for annual and quarterly advance payments in your monthly expenditure forecast.
  2. Plan purchases so that you buy only when you need to and avoid bulk buys that tie up cash for long periods.
  3. Consider leasing as well as outright purchase if you need new equipment. Vehicles, computers and machinery can all be sourced in this way and spreading the cost may be worthwhile. A proportion of the VAT on leased cars can also be reclaimed
  4. Regularly check your bank balance.
  5. Put money aside in high rate savings accounts to cover tax bills that don’t need to be paid until later in the year.
  6. If you have a small, VAT registered business, consider the Cash Accounting or Flat Rate scheme for paying your bill.
  7. Investigate diversifying to smooth your income stream if you have a seasonal business
  8. If you have a number of long standing debts and are experiencing a cashflow problem, consider selling your invoices to a factoring company but be aware that you will not get the full value of the invoice.

The ‘bottom line’ is when it comes to cash flow, prevention is always better than cure!

First published in 2008