7 things SMEs need to know about the new tax year

Coins

A new tax year starts on 6 April 2017, and various changes take effect on that date which you need to know about.

1. Ensure your employees have the correct tax code

The personal allowance increases to £11,500, and the higher rate income tax threshold increases to £45,000. This means your employees will take home more of their monthly salary than they did in the previous tax year.

2. Ensure you are paying the correct hourly wage

The National Living Wage rises to £7.50, in line with the pledge made by Philip Hammond in the autumn statement.

3. Consider changing to cash basis accounting

The entry threshold for cash basis accounting increases from £83,000 to £150,000. If you are a trading business with straightforward tax affairs, this is a simplified way to calculate your taxable profits (it’s optional).

4. Pay less corporation tax

Corporation tax reduces from 20% to 19% in 2017, and to 17% in 2020, meaning the UK will have the lowest corporation tax rate in the G20.

5. Note changes to business rates

As we have mentioned before, business rates increase – but £435 million relief has been made available to help ease the transition:

  • £300 million discretionary relief is available from local authorities to help businesses most affected by the revaluation
  • Pubs with a rateable value up to £100,000 can claim £1,000 discount for one year
  • No small business will pay more than £600 more in business rates this year than they did last year

6. Prepare for Making Tax Digital (MTD)

The VAT threshold rises from £83,000-£85,000.

Businesses with a turnover below the VAT threshold were going to have to submit tax information online by April 2018 – this has now been deferred for one year.

This means SMEs have more time to plan and prepare. It also gives software providers more time to update their products to cope with recording and submitting digital tax reports.

7. Welcome funding to improve digital and physical infrastructure

In the spring budget, the Chancellor announced:

  • £200 million for local broadband networks
  • £90 million to improve transport in the North of England
  • £23 million to address pinch-points on roads in the Midlands
  • £16 million for 5G mobile technology

This investment should help improve road networks and broadband connections across the country, and help boost productivity for SMEs.

Summary

In the current climate including planning for Brexit, we encourage all businesses to review opportunities, potential government support and cost-saving initiatives.

Akoni helps businesses make the most of their cash. Follow us on Twitter @akonihub or connect with us here.

How Brexit will impact SMEs

trigger

Theresa May triggered Article 50 on 29 March, starting the two-year process of the UK’s withdrawal from the European Union.

We’ve entered into an age of uncertainty – but SMEs can’t put growth plans on hold and adopt a ‘wait and see’ approach. Business continues as usual. Stock markets and inflation are holding steady, and Treasury predictions for growth remain the same as before the referendum.

Threats

SmallBusiness.co.uk says: “Small businesses are the lifeblood of the UK economy. Falling GDP will have a large impact on small businesses in terms of the overall activity of businesses and consumers buying their products or services…Small businesses are also more susceptible to shocks since they generally have a lower field of operation.”

  • Buying goods and services from other countries is now more costly. A weak pound is bad for the UK since we buy more from overseas than we sell
  • If prices rise faster than wages, consumers will start to spend less
  • Tariff-free trade with EU countries accounts for 44% of UK exports, so the cost of doing business with these clients has increased

The right of EU nationals to live and work in the UK is unclear, which may drive recruitment of UK workers and increased labour costs.

The Adviser Lounge warns: “If the cost of hiring skilled labour increases, the financial cost of Brexit to small business could prove too much to bear.”

Opportunities

Brexit undoubtedly brings threats, but it also presents opportunities.

Felicia Meyerowtiz-Singh, CEO and co-founder of Akoni says: ” Brexit and uncertainty also provide opportunities for revenue and business growth for UK business.”

  • Exporters are already benefiting from the fall in the value of the pound against the dollar and euro
  • The UK tourism industry should benefit, with an increase in staycations and visitors from overseas
  • Some employers anticipate potential relaxation of EU employment laws

So what can you do?

The world is changing faster than ever, with a combination of the digital revolution and economic uncertainty.

Here are some tips  from the Akoni team.

  • It’s easier for small organisations to remain flexible and adaptable. Demonstrate agile leadership and become comfortable with uncertainty and change. Don’t worry about what you can’t control, but plan for relevant risks that you can mitigate.
  • Streamline your systems and processes, such as the internal flow of information.
  • Identify the skill sets and attitudes you need, and train your people accordingly.
  • Maintain focus on customer satisfaction, monitoring social sentiment and improving your value proposition and customer journey.
  • Make use of new technology such as the cloud. Monitor data for trends and use it as a guide to threats and opportunities. Turn data into visuals that can be easily analysed and transformed into  good decisions and useful outcomes.
  • With a grasp of core financials, the CFO plays a key role of oversight, guiding the business in the right direction both short-term and long-term.

And finally, here are some ideas from other sources:

HSBC suggests: “We will need to improve in an area in which we have consistently under-performed: supplying the world’s fastest-growing economies in Asia and Latin America.”

SmallBusiness.co.uk says: “Small business should be looking to do everything they can now to protect themselves from future shocks… Diversifying out of, or into different markets might make sense…and now is the time to open dialogue with suppliers about pricing.”

Real Business advises: “By developing employees, you’ll have a more confident, motivated and proactive workforce who feel more positive about the future, and who are better placed to handle whatever comes along…Review your operation and pinpoint there there may be the opportunity to work with other similar-sized businesses who are experts in their field…Be as transparent as possible and involve staff in updates about the business where appropriate. This will foster strength and build trust amongst the team, which will be invaluable if the business hits any bumps further down the road.”

Change is here to stay. Whatever happens, Akoni will be here to help and advise.

Akoni helps businesses make the most of their cash. Follow us on Twitter @akonihub or connect with us here.

The last-ever Spring Budget: The business impact

Spring

On 8 March, Chancellor Philip Hammond delivered his final spring budget. From 2017, the budget will be moving to the autumn, with a spring statement instead. The intention is to allow more time for changes to be made before the next tax year.

Key points

Here are some of the key points that were announced:

  • Growth in the UK economy picked up through 2016, and the Office for Budget Responsibility (OBR) forecasts that the UK economy will grow by 2% in 2017, at a slightly slower rate in 2018, and then up to 2% in 2021
  • Britain’s debt stands at nearly £1.7 trillion – around £62,000 for every household in the country. In 2009-10 the UK borrowed £1 in every £5 spent. This year it is set to be £1 in every £15. Borrowing is forecast to reduce by nearly three quarters by 2016-17.
  • Employment has reached a record high of 31.8 million people

How the Budget affects SMEs

Here are some of the ways that SMEs and start-ups will be affected by the recent announcements:

  • There is a cut in dividend allowance for company shareholders
  • If you are an unincorporated business with an annual turnover below the VAT registration threshold, Making Tax Digital will become mandatory in April 2019 – after that, you will have to use digital software to keep your tax records and update HMRC every quarter
  • Self-employed people will have to pay increased National Insurance Contributions to bring them closer into line with employed people. From 2018, Class 2 NICs will be abolished. Class 4 NICs will rise to 10% in April 2018 and to 11% in April 2019.
    Update 15 March: The government has announced a U-turn on self-employed VAT, as explained in this BBC report.
  • Small businesses with minimal expenses (less than £2,000 a year) will now have to pay 16.5% under the Flat Rate VAT scheme

Rising business rates

We’ve written about rising business rates before, but here are some of the ways the Chancellor is sweetening the pill:

  • Business rates are increasing for certain sectors, especially the digital economy – but no small business that is coming out of small business rates relief will pay more than £600 more in business rates this year compared with 2016-17
  • Local authorities have been granted £300 million of discretionary relief they can use to help businesses most affected by the revaluation
  • From April 2017, pubs with a rateable value up to £100,000 will be able to claim a discount for of £1,000 on their business rates for one year

Consumer protection

Your business may be fined if you mislead or mistreat consumers. For example, if you charge consumers unexpectedly when a subscription is renewed or a free trial ends, or if your terms and conditions are too long, complicated or jargon-filled.

Investment in innovation

The Chancellor confirmed the government’s support of innovation, highlighting the Research and Development (R&D) tax credit scheme. They aim to improve awareness of the scheme among SMEs, and make administrative changes to increase the certainty and simplicity around claims.

£500 million is to be invested in technical education for 16 to 19-year-olds, with new T-levels being introduced from autumn 2019 covering 15 different subjects including construction, digital and agriculture. Students doing high-level technical courses at National Colleges and Institutes of Technology will be able to access maintenance loans from the government.

£270 million has been allocated to the Industrial Strategy Challenge Fund, to support research and innovation in:

  • Artificial intelligence and robotics that will work in extreme environments
  • Better batteries for electric vehicles that will help improve our air quality
  • Medicine manufacturing technologies to speed up patient access to drugs

£210 million will create new fellowships and programmes to attract top global talent to conduct research in areas such as bioscience and biotechnology, quantum technologies, and satellite and space technology.

£200 million is going towards local projects to build fast and reliable full-fibre broadband networks.

£90 million will provide 1,000 new PhD places, including in science, technology, engineering and maths.

£16 million is being invested into a national 5G Innovation Network to trial new 5G technology.

EIS tax relief

It has previously been indicated that the government will be reviewing existing tax reliefs aimed at encouraging investment and entrepreneurship (such as the EIS) to ensure that they are “effective, well targeted, and provide value for money”, however, Philip Hammond didn’t mention any change to Enterprise Investment Schemes at this stage.

We can only wait and see…

Akoni helps businesses make the most of their cash. Follow us on Twitter @akonihub or connect with us here.

How Wednesday’s budget could affect SMEs

Houses of Parliament

The final Spring Budget is on 8 March. From next year the Budget is moving to Autumn, with a Spring Statement. This change gives time for tax changes to be made in advance of the tax year, and provides businesses with more time to plan, if necessary.

Forecasts are showing sharp growth with borrowing lower than anticipated, and a £45 billion tax windfall for the Treasury in the next five years. January’s tax receipts are at the highest level since 1999, but Chancellor Philip Hammond is quoted as saying: “There is no pot of money under my desk.”

In this article, we’ve compiled some of the main predictions that will impact you and your business, and look forward to hearing what is announced on Wednesday.

Business rates

According to reports, some firms face increases of up to 400% in the April business rates hike.

The Chancellor has recently indicated that he is “alive” to the impact this have on some High Street shops, and “open” about finding ways to help.

Business rates are a property tax that doesn’t apply in the digital economy, and the Government is trying to ensure that online retailers such as Amazon don’t benefit to the detriment of traditional High Street retailers.

We expect he will announce some immediate measures that will mitigate the worst effects on SMEs (such as transitional relief), with more fundamental reforms to come in the future. No additional help is expected for supermarkets and corporations.

Misleading contracts

Companies that mislead or rip off consumers are to be targeted, because Ministers want to force firms to use plain English and make key terms more obvious. If not, they face a fine.

The Citizens’ Advice service estimates that 2 million consumers per year have problems cancelling subscriptions, and research shows that 42% of people are paying for at least one subscription they don’t use, such as gym membership.

Consumer watchdog Which? found that 90% of people ticked to agree with online T&Cs in the past year but only 16% always read them. For one thing, T&Cs are often very long, for example, contracts for mobile phones can run up to 40,000 words. They also contain acronyms and legal or financial jargon that mean people don’t fully understand what they are signing.

Plans will be therefore be unveiled to fine companies that tie people into long contracts or unexpected fees in their terms and conditions.

There may also be a crackdown on rolling subscriptions that renew automatically after a free trial, with new rules to ensure consumers are offered the chance to cancel the agreement.

Science and innovation boost

The Chancellor is expected to announce a £500 million boost from the National Productivity Investment Fund, to support science and technology.

Around £270 million will be made available for pioneering projects such as:

  • Technology that operates in extreme and hazardous environments
  • Cutting-edge artificial intelligence
  • Robots for off-shore and nuclear energy, space and mining
  • Batteries for the next generation of electric cars
  • Accelerating patient access to new drugs, by developing speedy new ways to manufacture medicine

£200 million will go towards new fellowships for researchers in areas aligned to the government’s industrial strategy.

A further £90 million will fund 1,000 PhD research projects in STEM subjects (Science, Technology, Engineering and Mathematics), with extra cash for investment in 5G communications.

Brexit

British businesses are calling for economic stability during the Brexit negotiations. The Confederation of British Industry says that uncertainty dampens investment and higher inflation erodes the growth in consumer spending.

Carolyn Fairbairn, Director-General of the CBI, said: “By supporting businesses to invest, the government can promote growth at a critical time.”

Rain Newton-Smith, CBI chief economist, said: “Prioritising stability will inject further confidence in the economy now, and help boost the country’s productivity and prosperity for the future.”

Anything is possible after Article 50 is triggered at the end of March. Bigger measures are likely to be reserved until the Autumn Budget, so the Chancellor can see how the economy reacts. Meanwhile, we know he is aiming to keep a pot of money as a safety net, to ensure the country negotiates Brexit with stability.

As always, Akoni will keep you posted.

Akoni helps businesses make the most of their cash. Follow us on Twitter @akonihub or connect with us here.

Heard about Small Business Saturday?

Apples

Small Business Saturday has been taking place on the first Saturday in December since 2013. The campaign provides free training workshops, celebrates small business successes, and encourages consumers to support small businesses in their community by ‘shopping local’. Although it focuses on one day, the aim is to change mindsets so people choose small businesses all year round.

This year’s figures are not yet announced, but on Small Business Saturday in 2015, customers spent £623m with small businesses – an increase of 24% on the previous year. #SmallBizSatUK trended at number one all day, with over 100,000 tweets sent, reaching over 25 million people. And over 75% of local council supported the campaign, for example, by providing free parking.

100 small businesses were highlighted in the 100 days running up to this year’s event on 3 December. They attended receptions at Downing Street and The Treasury Drum with the Chancellor of the Exchequer, and benefited from exposure on social media and in the local press.

One of the featured businesses in 2016 was Haven’t Stopped Dancing Yet! – a pop-up disco for people who love soul, funk and disco music from the 70s and 80s. Founded in 2010, they have performed in South East London and Birmingham, with vinyl DJs, dance line-ups, retro sweets and fancy dress prizes. Ad agency, JWT, called them a “trailblazer” for targeting the under-served 50-something market.

Spice Kitchen in Walsall is a mother-and-son team producing home-ground spices and spice mixes sold online via Etsy and Not On The High Street. They were also finalists in the Guardian Small Business Showcase competition, won a Great Taste Award in 2015 for their garam masala, and received the BBC Producers’ Bursary Award 2015 for up-and-coming food producers. The owners say customers love the products, and the fact that they are a family-run business.

Marvel Plumbing was one of the first businesses to be highlighted in 2016, and organised a fun event on Small Business Saturday to bring other businesses together and expose them to the local community. The company has grown from one man-and-van in 2012 to eight vans and four full-time office staff. They have also been asked to write and deliver part of the gas course for Southgate and Barnet College, so training future gas engineers to meet their high standards.

Small Business Saturday is a non-commercial initiative headed by Director Michelle Ovens MBE. It covers all types of small business, and is free to join. The campaign is supported by high-profile sponsors including American Express, Federation of Small Business, and Vistaprint.

This year, they have even launched a free cookbook containing recipes inspired by small businesses.

Find out more at smallbusinesssaturdayuk.com

Akoni helps businesses make the most of their cash. Follow us on Twitter @akonihub or connect with us here.

What the Autumn statement means for your business

Autumn

Chancellor, Philip Hammond, has delivered his first Autumn statement. Most announcements came as no surprise, with core messages about continuity of financial stability and control of public spending.

The statement was considered and concise, which is encouraging at a time of uncertainty. However, business groups interviewed by the Guardian didn’t consider the statement bold enough, and were disappointed that it didn’t tackle business rates or provide support following the Brexit vote.

Here are some of the headlines:

Impact on business

To reinforce Britain’s competitiveness while negotiating Brexit, Hammond confirmed he will stick to the business tax roadmap that was announced in March, with Corporation tax reducing to 17% and a reduction to business rates worth £6.7bn.

Funding

In an effort to boost the long-term economy and reduce the ‘productivity gap’, £23bn is going into a new National Productivity Investment Fund, including:

  • £7.2bn to tackle congestion and transport
  • £7.bn to support house-building (including £3bn Home Builders Fund to unlock finance for over 200,000 homes)
  • £4.7bn towards science and innovation
  • £2bn to accelerate construction on public sector land
  • £1.1bn for local infrastructure
  • Over £1bn for digital infrastructure (to encourage the private sector to roll out more full-fibre broadband and support trials of 5G mobile telecoms. What’s more, full-fibre infrastructure will benefit from 100% business rates relief for five years from April 2017.)
  • £27m development funding for the Cambridge-Oxford growth corridor (as recommended by the National Infrastructure Commission)

To make Britain the ‘go to’ place for science and innovation, these sectors will also benefit from an extra £2bn of funding per year for business research and development.

£400m is being invested into Venture Capital Funds from the British Business Bank, to:

  • Unlock up to £1bn of investment in innovative firms planning to scale up
  • Review to identify barriers to access to long-term finance for growing firms
  • Funding from the Department for International Trade for FinTech specialists

Benefits in kind reformed

Tax will become payable by employees who sacrifice salary to receive ‘benefits in kind’, except:

  • Cycle to work scheme
  • Ultra-low emission cars
  • Pension savings
  • Childcare

HMRC expects to gain approximately £2m through this measure.

Economic forecasts downgraded

As a result of the EU Referendum decision, economic growth is predicted to be 2.4% lower than previously expected. Here are the revised OBR forecasts:

  • 2016: 2.1%
  • 2017: 1.4%
  • 2018: 1.7%

Borrowing increased

Hammond made a distinction between borrowing to cover the deficit and borrowing to invest, and at £122bn, Government borrowing will increase significantly.

New fiscal rules

To protect against bumps during Brexit, Hammond announced three new rules:

  1. Cyclically adjusted borrowing to fall below 2% by the end of this Parliament, and public finances to return to balance as early as possible during the next Parliament
  2. Public sector net debt to fall as a share of GDP by 2020
  3. Welfare spending to be capped

Just About Managing (JAM)

Due to the state of the economy, Hammond avoided this phrase coined by Theresa May, but did announce:

  • Freeze in fuel duty
  • Offset the rising cost of foreign holidays
  • Ban on letting fees being charged to tenants
  • Income tax threshold rising to £12,500
  • Higher rate threshold rising to £50,000
  • Minimum wage rising to £7.50 (in 2017)
  • Possibility of removing the pensions triple-lock (after 2020)

Budget moved to Autumn

To allow time for tax changes to be made in advance of the tax year, the Budget is moving to Autumn. That means no more Autumn Statements – from 2018, there will be a Spring Statement instead. At least that means major changes will only happen once a year.

If legal hurdles are overcome and Article 50 is triggered at the end of March 2017, the final Spring Budget will be a significant measure of the nation’s fiscal position.

Going forward

Although there are many challenges and changes to the economic climate, the Government is committed to boosting business in the UK.

Philip Hammond said: “My priority is to ensure that Britain remains the number one destination for business – creating the investment, the jobs and the prosperity to protect our long-term future.”

Akoni helps businesses make the most of their cash. Follow us on Twitter @akonihub or connect with us here.

10 Quick tips on Juggling Parenting and Business

All of us with families have the constant struggle of balancing our work and family life.   Even when we are passionate about and consumed by our work, it is something we continuously think about and consider how to maximise, to focus on the important aspects of both.   Here at Akoni we have the same dilemma and thought we would note a few  helpful tips in navigating this lifestyle.

1. Family and Business can work – don’t give up on your dream

Focus on the positives – think about how your career or your business is benefiting your family.  As long as you prioritise what you need to achieve and mange your time and to get the balance right, you will feel more confident with yourself and your decisions.  A happy mom or dad means a happy family.

2. Prevent Chaotic Mornings and Evenings

You don’t need to be in your office every morning before sunrise, in fact most entrepreneurs say having morning breakfast with the family helps the children to feel happy.  If they aren’t happy then you may feel frustrated and this will have a knock-on effect throughout your day.

3. Perfection is not expected

Particularly for women, the perfect house you had before children doesn’t need to still be perfect, rather keep on top of you household chores with some of the tips below and allow yourself time to be with your children, the condition of your house can take priority once your children have gone to college and when you will have time to appreciate it more! For all us, don’t worry about perfect time keeping take 5 mins on the way into work to stop and get yourself a latte or a juice, or just walking to work instead of driving or taking public transport can give you a chance to recharge.

4. Consider Hiring help

Hiring help in the home is a great alternative to bringing balance back into the work-life scale we all battle on a daily basis.
A survey recently found that one in three British Households now employs someone to help with chores, spending £26 billion a year on help in the home. Not everyone can afford full-time help – even a bi-monthly cleaner will help you feel a little more in control. You can also devise a system for tackling housework to help you handle this seemingly never ending task. Get your children to pitch in – small children as young as 3 can help with household chores. Share tasks with your partner – you have both had a long day, share the workload at home.

5. Spend Quality time with your children

Making time for your family and children is crucial and allows you to nurture your family dynamic. Create activities that regular fit into your schedule and avoid talking about work or checking emails and messages during these times. Ask older children for their activity suggestions and try to meet their needs. In the end it doesn’t really matter what you do as long as you are enjoying time together.

6. Designate a “no work zone” in your home

Depending on the layout of your home – find a no work zone.  The lounge is usually a good place to relax with a glass of wine or cup of tea after a long day, put your feet up and chat to your partner, play with your children, or watch a movie together.  If you have a strict no work zone within your living room, it will stop the need to bring your laptop or phone with you leading to you not completely relaxing or engaging with your partner or children.

7. Create time boundaries

Be disciplined and set time limits to check emails and make phone calls, things you can do whilst your children are sleeping. Try to avoid multi-tasking, especially when spending time with your children.  A good rapport with co-workers is great and beneficial, however you can have this without numerous email exchanges, extended lunches and casual internet surfing. Focus on your tasks at work and use breaks and lunchtimes for chats with co-workers, thus enabling you to have more time with your family once you are at home.

8. Don’t overlook the benefits of childcare

There is no way you will be able to do your job properly if you are worried about your child’s wellbeing whilst you are at work. Find childcare that both you and your child will be happy with.  Obtain recommendations from friends and families or online forums, write a list of important criteria and schedule time to meet carers or visit nurseries.

9. Be fully engaged

Your priorities and time management rely on you to be fully engaged. If you look at your email whilst you are having breakfast with your children, this will create a half-heartedness engagement with both your children and your work.  Ideally aim for your complete presence in all situations. Rather use the time you have specifically set aside to check emails, speak to colleagues and spend time with your children, helping you to be more focused and more productive.

10. Know when to unplug and how to relax

Limit your screen time to first thing in the morning or intervals during the day which you have decided are the best for your daily tasks. Again rather have time allocated to checking emails and working so that you know you can be 100% focused on these tasks and know that after that is done you allow your self to action anything that requires immediate attention. Do the activities which relax you – sports, running, having a long bath, spending quality time with your partner. If you don’t unplug, you will find your daily tasks will then overlap important family time and you will not be fully engaged in either.

It is important that we all feel we are spending the most possible time with our family. We hope the above pointers helps you to balance out your business and family over this festive season. Enjoy the seasonal break!   If you have any time off,  focus on presence and if you don’t, remember that your children and partner will appreciate any time you are able to give them.  Aim  to fully recharge during quieter moments, reflecting on moments of priority and importance, in order to start afresh in the new year. 

Akoni helps businesses make the most of their cash. Follow us on Twitter @akonihub or connect with us here.

 

Brexit, the US Election and British Business

After a seemingly endless trail to these fraught US elections – which have featured more turbulence, twists and turns than a series of Game of Thrones – businessman Donald Trump has become the 45th President of the United States. Indeed, 2016 will go down in history as one of the most volatile financial years ever. With the uncertainty of Brexit dangling over their heads like the Sword of Damocles, hundreds of Britain-based SME’s are now facing the impact of “Trumponomics” on top of Brexit uncertainties.

As expected, the dollar immediately plummeted after Trump’s victory, and may be unstable for a while. The US economy may take time to settle before changes start to kick in. The main European markets ultimately ended the day up – as such the expected meltdown did not occur. Experts are saying that radical change is unlikely to happen immediately – which is good news for stock markets. How the US economy reacts over the next few years will be interesting to watch, however.

Trump’s victory speech certainly soothed some fraught nerves, and towards the end of the day many markets were calmer. The President Elect spoke of healing and uniting the nation, he offered his thanks to Hillary Clinton for her service and hard work over the years, and talked about global relations.

While a Trump presidency is likely to add to global economic uncertainty, analysts believe the impact on the UK economy will – at least in the short term – be limited. Capital Economics has left its forecasts for UK growth unchanged 1.5pc in 2017 and 2.5pc in 2018 following the US election result. Outside the EU, the USA is the UK’s biggest export market, with a fifth of UK goods and services sent to the world’s biggest economy, equivalent to 6pc of UK gross domestic product (GDP). But Jonathan Loynes, an economist at Capital Economics, argues that there are several reasons why a Trump presidency would not be as painful for the UK, as it might be for other European countries. He sights factors such as the plunge in the value of the pound following Brexit – ultimately helping the UK to regain it’s competitiveness; a weaker dollar against low yielding currencies could help the pound to “find a floor”, easing concerns about runaway inflation. He also added that the political consequences for the UK, due to our good relationship with the US, plus the bonus that the UK has already had its “revolution” against the establishment, as positive factors. Brexit inspired the Trump vote, while mainstream politicians in the euro-zone – especially France, Italy and Germany – will be looking on with considerable unease while populist parties take encouragement from the events that have unfolded in the US and teh UK.

Britain’s main stock index, the FTSE 100, recovered from it’s early-morning slump, gaining 0,7 percent, while Germany’s DAX was up 0.5 percent and France’s CAC-40 gained 0.5 percent. This pattern has echoed the reaction to the Brexit vote – only it happened much faster: complacency, surprise and panic followed by swift recovery. Maybe Trump will prove to be less controversial than he has promised? Let’s hope so.

Practically speaking, there is a bit of breathing space before all these policy changes would come into being. In a Brexit scenario, the process of leaving the EU will take two years before it is phased in. The US president is sworn into office in January 2017, after which policies that President Trump has mentioned in his campaign will need to be passed by the Senate – and his revolutionary policies may or may not be approved by the extremely conservative administration in place.

pexels-photo-159888-large
Extraordinary times call for caution and sensible business practice.

In terms of practical advice for businesses, it is crucial that they use this period to renegotiate, reassess and re-strategise to manage all foreign exchange risks. Many companies buying US dollars have already shortened the length of their forward contracts significantly, dropping these from an average of 90 working days per contract to less than 70 days, in anticipation of financial upheaval. Some 75 per cent of the earnings of the UK’s largest 100 companies come from overseas with many reporting their results in dollars. If we are faced with a situation where the pound becomes weaker, the knock-on effect may be felt down entire supply chains.

It is also on businesses to make sure that these supply chains are performing super-efficiently and cost effectively. It is a good idea to try and renegotiate future deals with one’s current suppliers, or in some cases, seek new suppliers who can offer the best possible deals.

It seems that UK business owners are relentlessly carrying on with business as usual. Given the difficult economic conditions in the recent past and the unpredictability of the future, business owners here have come to believe that with a combination of new technology available (i.e. access to effective ways to market their products online and many business tools) together with their own hard work, an innovative approach and good business management, there is every chance  of succeeding in this economic climate. After all, small businesses are essential to the economy of the UK, and the government knows it. Trump is all about business, hence the world is all about business as never before.

One part of Britain that will have their eye firmly on developments in the USA is Wales. For 70 years the US has been Wales’s top investor, accounting for 40% of the foreign money invested in it, and therefore the ramifications of the Trump administration’s economic policy are of massive interest there. Around 275 US companies are employing 48,000 people operating in the region – a significant chunk of the economy. Welsh exports to the USA are around £2.7bn while imports from the US to Wales are valued at £0.6bn.

Theresa May’s diplomatic message to the President Elect was that Britain and the USA have had an enduring and special relationship based on the values of freedom, democracy and enterprise in the past. The USA has been a close ally of the UK, with British foreign policy being closely coordinated with the US.  This special alliance has been strengthened by close cooperation through the World Wars, the Korean conflict, the Persian Gulf War, in Operation Iraqi Freedom, and in Afghanistan, and through trade agreements such as NATO. The two countries are in constant contact on foreign policy issues and global problems.

After Trump’s election result was confirmed, the UK government has made it clear that it is open to beginning a new trade relationship with the US. Keeping an eye on the business ball but adopting an optimistic outlook, wouldn’t it be excellent if trade relations with the US were favourably negotiated for Britain – offering new and favourable markets as an alternative, or an addition, to existing European markets after Brexit kicks in?

As long as businesses are prepared for the inevitable ups and downs ahead by having various risk mitigation plans, including buffers and insurance strategies for padding, there is a great chance that the effects of these upheavals can be minimised – even optimised.

Akoni helps businesses make the most of their cash. Follow us on Twitter @akonihub or connect with us here.

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6 Reasons Why Professionals Want to Work at SMEs

Statistics show that the SME sector continues to grow: 58.3% of small companies plan to take on staff over the next six months, up from 56.7% last year and just 48.9% the year before. There is no doubt that the future of business rests on the bedrock of upcoming SME’s. Small companies are vital to the economy’s growth – and even more so now after Brexit. It is not surprising, therefore, that the perks of working for a small business are being noticed by the best of the jobseekers.

When Linkedin conducted its latest Job Job Satisfaction Survey, it found that 87% of professionals that took part were keen to work for a startup or small business (employing 10 or less than 10 employees), rather than at larger companies. The survey questioned more than 10,000 professionals and over 3,500 employers worldwide. 

There were some surprises amongst the statistics: the survey found that 45% employees of small businesses were Very Satisfied or Fulfilled at work; that SME’s had some of the most loyal employees possible – 3 out of ten 10 wanted to stay where they were for the rest of their lives. Just over one in three small business employees were willing to take a wage cut to work at a startup or small business, and 77% say they would recommend their small business to their friends and family as an employer.

It was found that being able to align one’s values with one’s employers values was crucial to job satisfaction. Salary and promotional opportunities are key motivators for professionals today. Another major factor was work/ life balance (see our previous blog on this) which topped the list – even before salary – for people over 40.

So – why is it so desirable to work for a startup or small business?

1. Small business are perceived as being more flexible – “more human” – when it comes to making demands on their employees. If one is part of a small team, each member matters more – to get employees performing at their best, it is important that they are supported in their work. Working from home, flexible hours, bringing kids or dogs to work – there is often a way of making challenges into advantages for the business and the employee, with a bit of creative thinking.

2. Get ahead – much faster. Because each person in a small company is relied upon from the get go,  taking on further responsibility as the company expands, and therefore your rise through the ranks is quicker. Your talents are also more noticeable because there aren’t another hundred of you doing the same job.

3. Hard, but satisfying work: It goes without saying that you are expected to produce the goods – and often for less – but there are such great rewards. To be involved at the start of a small business is always a good thing – you will ride the wave of success, and be a part of the financial wealth when that comes.

4. Culture fix: Most small businesses are very picky when it comes to new employees – and for good reason. Apart from having to have the appropriate skill set, the candidate also needs to fit into the company culture. Creativity and genius flows in a safe place to innovate and conceptualize – and everyone’s different personalities need to gel, for maximum results. Each company has it’s own quirks and fitting in comfortably with these are essential.

5. Broaden your skill set: In small companies there is more likelihood of learning new skills and possibly even working across different departments. Sometimes everyone needs to “muck in” to finish a presentation for a deadline or cover for someone who is off on leave. You’ll see how the business operates as a whole, and develop transferable skills.

6. You can make a big difference: In an a small business it is hands-on. The chance to grow and to be there as the company develops, is exciting. Many people feel satisfied in their jobs at SME’s because they’re able to see real, tangible results of their work.

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Small business may be the most attractive employment option to professionals, yet it struggles to reach the right talent. Social media and an online presence can help boost your profile in the right places in order to overcome this challenge. Image: Pexels.com

Interestingly, SME owners who took part in the same survey said that they found it difficult to attract the talent they need, because of competition from larger organisations in the job market. They battled to become noticed.

Many SME’s don’t have a specific brand – they often grow fast and are so busy managing this, that their very persona is never honed. This is an essential step in the growth of a successful small business – if you don’t know who you are – what your authentic core values are – how are customers or top drawer job-seeking professionals going to find you? Providing happy employees the brand marketing tools to sing your praises over social media, small businesses can really make an impact in all the right areas.

Times are changing – a grand job title is not much of a motivator any more. Compensation, work-life balance and opportunities for advancement rank as the three major motivators amongst job-hunters. They want to be contributors who can make a positive impact on a business, hopefully learning new skills in the process. That is why SME’s are attracting the talent they deserve, and shall continue to do so.

Akoni helps businesses make the most of their cash. Follow us on Twitter @akonihub or connect with us here.

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#timetorebalance: Your Work/ Life Depends on It

As a small business owner, you are most likely a Jack of All Trades and a Master of Most. Managing your business often implies that you multitask and cope with production crises, cashflow nightmares and so much stress that you never sleep properly. Well – this is National Work Life Week, and having been a small business owner myself, I understand why it is necessary to create a national campaign around Work/Life Balance – because SME owners are far too busy and stressed to notice it otherwise!

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Here are some tried and true tips I have practiced – hopefully you’ll find them useful too. Listen Up – it’s time to take stock, #timetorebalance:

Remember why you started your company in the first place. You spend a large percentage of your life working – you go through stress and sacrificing many things for your SME to succeed. You need to remember the passion that lead you to getting it off the ground. Keep coming back to that. That is what will get you up in the morning.

Learn to delegate. You won’t believe how liberated you’ll feel when you hand that work that you hate doing and aren’t very good at anyway to someone who specializes in it! Now you can concentrate on what you are best at, and this will be much more rewarding and enjoyable. By delegating, you will lower your stress levels. Use tools and apps to cut down on one’s workload and money spent on travel and outsourcing significantly. Here is a range of some that may be useful:

  • Cash management and accounting tools such as Xero, Freshbooks, Quickbooks, Sage are the most widely used, and all are excellent products, well worth investing in. (Have a look at our Akoni blog on Cashflow Tips for SMEs for some more on this subject).
  • Try Skype, Google Hangouts, ClickMeeting for online meeting and webinars. These can be used to conduct webinars, teleconferencing, online meetings and presentations. No more travelling out of town or even across town – saving you money and time.
  • Asana is a task and project management productivity tool for team collaboration and communication that eliminates the use of email. Free for up to 4 users. With Asana, you can set up projects, and tasks within projects. Add staff or clients to tasks and projects to keep everyone up to date.
  • Apps like Producteev and Harvest let you see how you’re spending your time, what’s on target and what requires follow-up.
  • Pocket – this allows you to store videos, articles or anything else you find of interest. It’s all in one place and ready to look at when you have time.
  • Evernote – one of the most popular apps for managing a to-do list and keeping notes. It even has an app to make it faster to read blog posts and articles by showing them in a simple format.
  • WorkflowMax: An end-to-end time tracking and invoicing solution, seamless integration with Xero Accounting software.
  • Hootsuite for social media management
  • For some more interesting tools, have a look at useful tools for SMEs

Learn to set boundaries. If you are open about realistic timings at the beginning of each project, explaining why you need that time to do a good job, your clients are far more likely to understand – because they need the best quality product you can deliver.Turning down work is hard, but is it worth taking on if you and the client are going to be dissatisfied with the result? Your reputation may suffer, which affects future work and client relationships.

Write things down. In this age of electronics it sounds archaic, but often the simple task of writing down ideas and thoughts or tasks that you think of suddenly will reduce your stress levels. Write a  TO DO list before lights out. It clears your head, and facilitates sleep, knowing that you will have your list when you wake up. Same goes for those 2am thoughts – write it down and there is a good chance you’ll get to sleep again.

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Activate your brain and body. Your body can’t take stress for extended periods without it having often serious health consequences. Find something that you enjoy doing. The brain and body benefit far more if you practice an activity you prefer instead of dreading your training sessions. Yoga, running, lifting weights, walking – just get out and do something fun. Your brain needs blood flow to function at it’s best, and different environments are stimulating.

Family is important.  As a small business owner, speak to your employees about what they would suggest in terms of flexible hours and/or the option to work from home. Being flexible in one’s approach will have benefits all round: happier employees, better quality work, you’ll attract quality talent when recruiting and your clients will ultimately benefit from dealing with a motivated company. Have a look here for some more tips as an employer.

Remind yourself what success is. Ian Sanders, author of Juggle: Rethink Work, Reclaim Your Life and Mash Up says,I recommend creating a personal dashboard where you set out the things you want in life and the reasons why you are doing them. You should write down all the things that are important to you, whether it is making money, creative stimulation, spending time with your kids or playing tennis. These are your definition of happiness and success. Then you can monitor this regularly to see how you are doing.” 

In this frenetically-paced age, it is important to keep your eye on what Really matters – your health, your happiness, your family and your goals in life. Enjoy what you do, otherwise change it. A frazzled, crabby and stressed business owner is not going to be any good to anyone. You owe it to your family, your staff and clients to be the Best Version of You possible. And that means gaining perspective by getting away from work every now and then – really make an effort to unplug from all those digital devices, look up at the sky and B-R-E-A-T-H-E deeply. Your life depends on it.

Akoni helps businesses make the most of their cash. Follow us on Twitter @akonihub or connect with us here.

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