Expert Business Q&A
Barclays Business Marketing expert, Travers Clarke Walker and founder of Naturally Cool Kids, Fiona Wood answer your business questions.
Imnotaslimjim: I'm looking at starting up a cake business at home. I'm building a website, advertising on Facebook for potential customers, I've ordered business cards and flyers and I'm looking into food handling courses, just waiting to hear from the council as to which one I need. What else do I need to do?
Travers: Wow, it sounds like you're well on your way! When it comes to business, research can be the key to success, so it's worth finding out as much as you can about your future market and competitors. Have a think about these areas, as they are some of the key things that can affect your start-up's future:
- Is the market you're entering growing or changing, and if so how?
- Will you face much competition in the market you've chosen?
- Who are your nearest competitors, and what makes your business special?
- Get together a factsheet on your nearest competitors, so you know where you can get the business edge over them.
- What community are you becoming part of?
- Talk to other local business people and get the inside story – lots of entrepreneurs are happy to help, either informally or at more structured networking or mentoring events.
- Look out for business events in your area – you never know who you'll meet and you might just find the perfect person to help you succeed.
All this research should really help when it comes to putting together your business plan, which is an essential part of starting any business. There's lots of information online about creating a business plan, including templates to download.
Barclays also runs free seminars throughout the year, where you can get expert information on making your business idea into a successful reality. Check the website to see what's coming up and make the most of the support available.
Fiona: My favourite subject: Cakes! When you are setting up a business like this from home, the council usually come out to assess your home and its suitability. They should also advise on a hygiene course – these are usually a day or two long.
You also need to think about insurance when selling your products to the public. This is not usually that expensive but does give you peace of mind. And remember to let your local tax office know about your business, so that they can make a note that you are now self-employed.
I would also recommend setting up a business bank account, as it should help you keep business and personal funds separate. Getting into social media is a great idea – why not take it a step further and link up your Facebook page with Twitter to build a really good following by working the two together and letting them feed off each other?
I suggest you make up some cakes and photograph them on a white background, so you can make press releases with images and send them to relevant magazines. Wedding titles, in particular, are always looking for new companies and fresh ideas.
LoveBeingAMummyAgain: What advice do you have for someone who is starting their own business part-time whilst working elsewhere? I've never run a business before and I've been told Business Link no longer do the courses for people starting up like they used to. Where can I go for advice? When do we need to let the taxman know? Which costs can be deducted? Currently we have spent money but not yet tried to get any business and therefore not made any.
Travers: There are lots of places you can get support when you're first starting your business, and Business Link is still a great source of information. Take a look at their section on taxes and check which elements apply to your business. Tax deductions depend on the type of business and on the sort of costs you've been paying out. If you have a business bank account already, your Business Manager should be able to recommend a good local accountant who can help you organise your taxes and make sure you are on top of your outgoings.
When you're setting up, it's really important to factor any initial outgoings into your plans and include them in your overall cost forecasting, so you can create an overview of how much you have invested and when you're likely to break even.
A good place to start is to make a budget for the initial stages of your business, and stick to it. Staying on top of bookkeeping in the early stages will make financial planning easier going forward. If you're not sure how to do this, the Barclays Business Essentials software package could help – available when you open a Barclays Business account.
Fiona: Travers is right. Getting these initial stages right is really important. The taxman will need to know that you are trading, even though you haven't sold anything yet. It's best to get this right from the start to avoid any problems later on. The Inland Revenue are also really helpful. I would definitely recommend giving them a call for an informal chat.
With regards to Business Link, it is such a shame that these courses will no longer be available, however many private companies are starting to fill the gap that will be left. Some will charge for their courses but others do them for free. Antonia Chitty of AceInspire runs free online webinars and supplies lots of free information. You can then step up and take their paid-for courses if you so wish. Mumpreneur UK hold an annual event that also has free seminars that you can attend. I have benefited so much from these that I highly recommend them. And don't forget Mumsnet and other networking and parenting sites – it's amazing how everyone comes together on these sites to really help each other.
When I started, after a very long time at home with the children, I didn't know what had hit me. I find I never really switch off and working from home I find myself sneaking off to do that little bit extra at all times of day, which is very tiring. It is however the perfect lifestyle for me but I can imagine it wouldn't suit everyone. Having a great family around to support you whilst working and running a business will be vital. Running you own business will probably be one of the hardest things you will ever have to do, but the rewards really are worth it.
MediumOrchid: I am about to start a business making and selling jewellery, alongside my full-time job. How much money do I need to be making before I have to do a tax return and at what point would I start paying tax? And how would this change if I didn't have a fulltime job? Also, I am hoping to sell my products to shops, do you have any advice about that?
Travers: Take a look at LoveBeingAMummyAgain's question, but also remember that your personal circumstances affect how much tax you're liable for. Don't underestimate the value of an accountant. Most give free initial consultations. It is ideal if you book an appointment with an accountant early on, to ensure that you are taking the right steps. At Barclays Business, we offer a free session with an accountant when you sign up to our Start-up account.
Take advantage of business and networking events in your area, as they often have support on these complex aspects of starting your own business and take a look online at the information available about tax and how it might affect your plans.
Fiona: This is one of my past ventures so hopefully I can help. As retailers seem to be very cautious about spending on new lines at the moment, it might be a good idea to offer them different selling options. I used to sell my jewellery in shops and spas, and you could also target hairdressers, beauticians etc as the people attending these places obviously like to look good and are willing to spend money to achieve that goal, so they may be more inclined to make an impulse purchase here.
When you price your pieces, you agree the percentage of the price you would give the retailer. Then, when you visit the shop each month to replenish your stock, you can add up how much was sold and give the retailer their share. This way, it fills space and looks good in their shop and you get the exposure you would like. Plus, it isn't costing the retailer from the outset. Seasonal markets are fantastic for selling jewellery, as people often go looking for different pieces not found on the high street.
Arachnophobic: I really would love to set up my own business but don't know to go about deciding what I want to do, as I don't know ultimately what would be successful. Ideally I'd do something child-related. What would you suggest in terms of research to help me make up my mind?
Fiona: I spent many many hours contemplating what to do. I have tried many other avenues and I have finally found where I belong. Look at what interests you and what makes you excited inside. If you don't have a passion for something then it's much harder to give it your all, so you must find an opportunity that works for you.
I would take a look on The Baby Show website if you are considering the baby/toddler industry. You can have a look at all the different companies out there, the majority of which are run by mums. Next, I would visit the shows, talk to people on the stands, ask them for their stories and what inspired them to take the plunge in their sector. Industry websites are great for finding out information and they may just spark an idea for you.
Do you have a hobby? Do you love buying certain things? It could be clothes, jewellery, baking, gardening - the options are unlimited. Why not have a brainstorming night with your girlfriends? Treat them to a takeaway and grab your pens and papers. Jot down what they see you doing or what they think you are really great at. You may be surprised at some of the comments.
Travers: I totally agree with Fiona on this one. Whatever business you start, it has to be something you believe in. If you're full of ideas but not sure which one you could make into a success, then you could try spending some time researching your potential customer base. It doesn't need to be expensive.
Once you have formulated your ideas a bit, test them out on your family and friends - their feedback could be invaluable. Test to see which one excites them the most as they could be your future customers. Also explore building an initial plan for each of your ideas. Then, see which one you're most committed to, which one you think plays to your strengths, and which one you can most easily start to build a plan for – it might be that you happen upon the perfect business idea for you.
xxDebstarxx: I want to set up a shop or cafe, and would like to know if there is any funding available for me. I am 35, work full-time although I am currently on sick leave, and am a single parent.
Travers: The good news is that there are funding options available to you and we run free seminars throughout the year that should help you decide which best suit your needs. We are also running a series of Lending Clinics across October and November which will look at different lending options available, visit the Barclays Business Lending Hub for more information and for details of clinics in your region.
Make sure you're prepared before you apply for funding, as going back and having to add to your application throughout the process can cause delays.
Do you have some personal savings that you can invest? If so, this shows your personal commitment to the business and gives lenders greater confidence in your idea. If your savings aren't sufficient to launch your business, a business partner could be of benefit. If you decided to start your business with a partner, you could both agree to put in a certain amount and share the responsibilities of the business. Find out more about starting out with a partner in the Work section of Barclays on Mumsnet.
Fiona: If you need funding for your project then another avenue to explore could be to take a look at Women in Business grants - I am sure there will be criteria you will need to meet but definitely worth investigating. If they cannot help ask them who else may be able to.
In the meantime start putting a plan together looking at where you would like your café to be, how much the rent and rates would be and how much it would cost to stock and kit out the premises. That way you will be prepared when you do get a meeting, and you can put all your findings together for them to look at.
Larakitten: I have just started a business, and I found out that the courses that HMRC used to offer have now been stopped so would appreciate some advice about National Insurance Contributions. I think I have it clear in my head but would appreciate some clarification. Plus, how to go about marketing on a £0 budget would be handy too. Also, are there any grants etc available for small concerns starting up in Scotland?
Travers: Firstly, figuring out your National Insurance contribution can be tricky but luckily you can find out more on the HMRC website and they even have an interactive tool that shows you how much you have to pay.
When it comes to marketing on a budget, you're in luck! There are lots of ways to promote yourself on a shoestring. Check out the Barclays website for more information on marketing your great business idea, but to start with, you could think about:
- Getting some coverage in the local paper
- Using social media to promote your new business – make sure this is really targeted to the new customers you are trying to attract
- Going to networking events that suit your business type
- Have a think whether any of your social groups would respond to your business – is it the sort of thing other mums would be interested in? Would any of your relatives and their friends be potential customers? – If so, next time you see them take along some information on your business and be ready to tell them all about it.
Fiona: First of all, I would get in touch with the Scottish Enterprise, they have a wealth of information on their site and have different funding available depending on the type of business you are running.
Through the Scottish Executive, the Research and Development Grants for Business is a scheme that supports businesses of all sizes in developing new products and services with the aim of benefiting the Scottish economy. Assistance is available to businesses located within the Scottish Enterprise Network area or businesses intending to form a base.
Marketing is much easier now thanks to all the technology we have around us. There are lots of Women in Business seminars and workshops that you can get involved in and hundreds of free networking events that are great.
I'm not sure what you are selling but if you check out the magazines and papers that apply to your industry they are always looking for fresh new ideas and would love to have a look at what you have to offer. Be sure to send your information to the correct person and make it short and snappy to keep their interest. If you can give them a sample and supply them with images it makes their life much easier and they may be more inclined to use it. Antonia Chitty and Erica Douglas are fantastic ladies to check out, they run Aceinspire and give wonderful free and paid-for advice.
Tee2072: I have been in business for just over a year and only have two clients. I'm about to start a marketing push and am thinking about apply for a business loan to help me finance it. Any tips on what a bank actually looks at, other than future earnings? Are a Business Plan, Marketing Plan and/or other documents like that really necessary and/or useful?
Travers: The short answer is 'Yes!' A business plan, marketing plan, cash flow forecast and other supporting documents will all help you build an application for business finance.
The good news is that Barclays are doing more than ever to help businesses through the lending process and are always on hand to discuss your options with you. For further help on what you might need, read our eight-step guide to a successful application. In the Business Lending section of the Barclays website, you'll find document and application checklists, and other tips on securing the financing you need.
In the meantime, take a look at my answer to larakitten for some ways to get your marketing push started while you get your business finance sorted. Showing that you are already doing what you can to promote your business without funding could help show your commitment to the success of your business, helping to reassure potential investors.
Fiona: Congratulations on your first year in business! It could be worth your while exploring grants first, as it may be that the business you are running may be eligible for funding - sometimes worth a try before borrowing.
In my experience, Travers is spot on, if you are going to the bank they will definitely want to see a business plan. This is also a useful tool for you as it keeps you on track, and as you refer back and change bits along the way, you can map you way forward. They will want to see as much information about your business as possible, try to provide as much as you can at the first meeting to help avoid any delays. If you have some funds of your own this may helps too as it shows you are personally committed to the success of your venture.
Darthwitless: I have started my own business and now I want to take it up a level. At the moment it is very much a service for friends but I need to raise my game and make myself look and feel more professional by doing IT training, thinking about marketing, pricing my products etc. I also want to write a business plan but I don`t really know where to start. Advice please!
Travers: As you've discovered, in order to grow your business it's often necessary to learn a host of new skills. Learndirect offer a range of courses in subjects such as IT and sales and marketing, which could help, or alternatively you could get some marketing inspiration from our website.
Writing a business plan is one of the most important tasks when starting up on your own as it helps you define exactly what you want to achieve and how to go about it. Download our free guide to writing a business plan and then why not ask one of your friends (or current customers) to take a look and see if they think you're really selling yourself and your business?
Until you start to look more professional, work on your elevator pitch – a very concise explanation of your business – that way, you can go to networking events, talk to potential clients and it may help you feel more confident in explaining your business. Take a look at the business videos in the Work section of Barclays on Mumsnet for inspiration on getting your business off the ground.
Fiona: A business plan is a really great place to start. Take all of those ideas you have and put it down on paper, this will clear your head leaving room for you to prioritise what needs to be done first. Business Link are now in the final few weeks of running, but if you go to their website they do havea free Business Plan template that you can download.
Networking is really the place to be if you want to meet people who can help and support you in the transition from hobby to business. Go along to a networking event in your area and try to chat to people from lots of different backgrounds and sectors. And persevere with it, it may take three or four different events before you find one that works for you.
ThanksDr: I have a startup that has been loss-making for 18 months now. I really need a marketing boost (on a shoe-string, naturally). Can you suggest any good books to read about marketing and sales? If I wanted a bank loan to help with marketing at any stage what hoops would I have to jump through to get one?
Travers: In answer to your first question, a good place to start might be to take a really good look at the ways you've been marketing yourself and your business so far. What has worked and what hasn't?
If you haven't started any marketing yet, then don't panic – you could try taking everything you know about the customers you are trying to attract and planning some really targeted marketing for them. Where some businesses really benefit from word-of-mouth, others need to build an online presence – it really depends. When you open a Barclays business account you will also receive a free consultation with a marketing professional who can help you to build a marketing plan that really speaks to your customers.
Some other helpful questions to ask yourself might be:
- What is it about my business that my customers will respond to most?
- What other marketing do my customers really take notice of?
If you have people among your social groups who are in your target demographic, then you could try asking them what the best piece of marketing they have seen lately is. While it may be on a larger scale than you are able to mirror, you can still think really creatively to work out what it is that made it so successful – did they like it because it was funny? Do your customers value simplicity?
Take a look at my answer to larakitten for tips on marketing on a budget and see if you can tailor the different techniques to really sell your business idea.
As for applying for a loan, you will need to provide evidence that your business is in a solid position before applying. For information on how to help give your business the best chance of securing finance, head to the Business Lending section of the Barclays website, including our eight-step guide to a successful application.
Fiona: There are so many different books out there on the subject of marketing, I would really recommend;
- Ogilvy on Advertising, David Ogilvy
- Maxi Marketing, Stan Rapp and Tom Collins
- Commonsense Direct Marketing, Drayton Bird
If you do want to apply for a bank loan then you do need to have a good solid business plan to show for it. You will need to provide information about your background, the business formula and the financials and projected figures.
I have mentioned social media a lot in my answers to other questions – it really is a great tool for marketing yourself. If you are confident enough you could go and talk about your business at events – explaining what you offer and the experiences you have had so far. People love to hear other people's stories and it is a great way to get people talking about you and your business.
IrmaLittleteapot: Can I set up a limited company with just me as the sole director and secretary? Also where's the best place to look for capital for an internet start-up with user generated content? Where's the best place to network if you're looking for a business partner? I like working with others and work better bouncing ideas off someone else.
Travers: Before looking at the different funding options available, make sure you're in a really strong position to secure the finance you need.
- Do you have a brilliant business plan that really sells your business to potential investors?
- Have you worked out how much finance you'll need and how you'll allocate it?
- Have you built a cash flow forecast for your business?
For lots more help on securing finance for your business, head to the Business Lending section on the Barclays website.
When you're planning financially for your business, don't forget to work on your personal finance plan so you know that, whatever happens with your start-up, you and your family will be taken care of.
As for finding someone to work with, try out networking events, online business forums or if you're looking for one-on-one support, you could try looking into business mentoring services. MentorsMeis a great scheme that draws on the experience and expertise of business professionals, including banking professionals, to help support UK businesses.
Fiona: Yes, you can set up a limited company with you as the sole director and secretary. This only came into effect very recently, if you contact a solicitor that deals with setting up Ltd companies, they can usually take all of your information and do it all for you. This is what I did and it took all the stress out of trying to understand all the jargon and ensure everything was filled in correctly. They then sent it to me in the post in a nice simple pack – well worth the money as I was busy setting up other parts of the business.
Before looking for a business partner to share the business with, think very carefully about the implications this could have. I personally like to have full control of the business. Is there a way you could do this, but then find a good friend or mentor who you can run your ideas past and bounce your ideas about with? That way, the final decision is still yours, but you have the support of someone who knows what you are trying to achieve.
I have a very good friend who helps in my business but also runs her own. We go to lots of networking events together, partly to keep each other company, but also because we come back afterwards with two lots of information to work with. We also meet every week and have an agenda for each of our businesses and run through what we need to do and our aims for the week ahead, which is a great motivator.
Firstclassstamp: I want to set up business as a professional translator (so I can work from home and look after my family of six at the same time). I can't decide whether to set up a limited company or to simply register as self-employed doing my own self-assessment. I already have a computer and a place to work, but I need to buy a membership (of a translating portal), some specialist software and extra training. Will it still be useful/worthwhile to set up a limited company? Or should I wait till I am making some money? What are the benefits of having a limited company in my situation?
Travers: There are benefits and risks to consider with both legal structures. For example, if you are a sole trader you can be held personally responsible for any debts, but in a limited company, member's liability, as the name suggests, is limited. On the other hand, becoming a sole trader can be the simpler option and involves less paperwork.
The Business Link website has information on the different structures or chat to an accredited accountant or solicitor.
There are also lots of business forums online, and if you speak to others who have set up similar businesses to your own, then you could understand the pros and cons of each one – people are usually willing to explain their preferred option! Of course, these sources aren't necessarily accredited and you should check any facts with a reliable expert, but they might have some good or bad personal experiences they can share.
Fiona: Travers is right, there are pros and cons to both. If it were my business, at this point I would set up as a sole trader. Most people that set up a limited company have a lot of outlay and being limited gives you more protection than a sole trader status. If you look on Companies House there are plenty of helpful leaflets that you can download and read through.
Businesses that are limited do give people that sense of security when they are using them, but in your line of work I wouldn't think this would be the case and it would be more about your quality of work. I would also check out other people who are doing the same or similar work to you, this way you can see what their websites are like, how and who they work with, and if they are registered too.
KatyTuncer: I have developed a virtual personal trainer service just for mums whilst on maternity leave, launching this month. Like you I have a demanding day job, and now my son is nine-months-old I am about to go back to work. How have you managed to do both and still be a good mum?
180: I accidentally started my own business when I created a baby massage poster to remember the massage moves with my baby. It was popular with friends, so I took it further and I now get regular orders from ebay and my website, but I'm nervous to take it to the next level in terms of pushing sales and marketing and getting the product into shops. I'd love some advice as like Katy having small children, running a business and doing a full part time job is very challenging and it is important to work smart.
Travers: I think Fiona's better-equipped to answer these questions. But you could also take a look at the rest of the Work section of Barclays on Mumsnet for more hints and tips on balancing the running of a business with the rest of your busy life.
Fiona: Great question, but so hard to answer – I am the ultimate guilty mummy! I hate leaving my boys, even though one of them is older – they cannot believe I have a life of my own too now.
I sometimes think of it as managing your time to cause the least amount of disruption as possible. My youngest is now in full-time education so I do have a good few hours each day to complete work, but when he comes home I do have to drop everything and go into mum mode.
I find that if you can switch off at key times of day, like first thing in a morning and teatime, then they do feel like normality is there. In my experience, there is no point trying to work when your little one hasn't seen you all day and want cuddles and attention.
Once they are settled down for the night then you can switch back into work mode. And it should be quieter then as the phone won't be ringing. It may never be easy and the house may never be quite as tidy as it used to be, but as long as your business is working and your children are happy, then it will be worth it.
In response to the second question, having children makes it very hard to do everything but it can be done with careful planning. You remind me so much of Baby Signing Mummy. She set up her baby signing classes after she came up with a simple way to remind herself of the hand movements. She has been really successful and having a look around her website could give you some great inspiration on running your business.
If you create a great package, then why not take a stand at a couple of smaller nursery fairs? Then you can work yourself up to the bigger ones and on to the trade shows. Eventually, you and your great product will be out there for retailers to sit up and take notice.
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