There has been a lot of uncertainty in the world this year, with political events sending the stock marketing yo-yo-ing and the continued drawing out of Brexit making the markets increasingly nervous. What’s going to happen to investments in 2017 is almost anyone’s guess, and in some quarters appears to be more influenced by psychics rather than solid facts. One woman in America, for instance, is predicting a stock market crash because there have been crashes in and 1987, 1997 and 2007.

What to consider when deciding on investments

You don’t have to have a lot of money to make an investment. A simple savings account with a bank or building society counts as an investment. Other types of investment are:

• Fixed interest securities, which are also known as bonds, in which you invest in a government scheme or a company
• Shares, when you buy a stake in a company
• Property, such as buying a residential or commercial building
• Commodities, such as oil, steel, gold etc

• Foreign currency
• Contract For Difference, which are a kind of financial derivative
• Collectibles, such as art, antiques or even wine

Taking risks

You will always be taking a risk on any investment you make, even if you’re just putting your money into a savings account because the interest rate doesn’t always keep up with inflation.

If you’re investing in the stock market, although the rewards could be high, the risk is that you end up selling at a lower price than you bought them for, giving you poor returns.

How much you invest, how many risks you’re willing to take, and how long you’re willing to wait for a return on your investment is very much up to you. The perceived wisdom is that you never invest more than you can afford to lose, and to spread your investment over a number of companies – diversifying.

Getting the right advice

What you do need to do is talk to a good financial or investment adviser who will find out more about your circumstances and wishes, and then discuss the options to consider. Whoever you choose, make sure they are regulated by the Financial Conduct Authority (and not Mystic Meg!).

If you would like impartial advice on investment and wealth management, contact us to make an appointment with one of our experienced advisers.

Brexit hasn’t been out of the news since the vote to leave took place in June, and although the majority of the news stories concentrate on the effects of Brexit on larger companies, not many have looked at the SME in a local context.

The overall picture is still confused. At the end of September, the CBI reported business confidence worsened, but a GfK survey showed consumer confidence had risen slightly and are now back at pre-Brexit levels.

Smaller companies are less exposed to the global markets – the government estimates that out of the 5.4 million UK SMEs, only 110,400 traded with other EU countries. One poll discovered around half of businesses outside London think Brexit won’t disrupt their activities and nearly 70% are feeling more confident than they were last year, but inside London, that confidence drops to less than 50%.

Sarah Smits is the Finance Director of Hoddesdon business Ashbourne Insurance. Her biggest concern is the impact of regulation and compliance on the business. “We are only licensed to trade in the UK with UK domiciled insurers and customers, so there has been no impact to our client base or supply chain. We are mostly concerned about how Brexit will affect will affect regulations – until now regulation for financial services was dictated by EU laws, so we’re not sure if post-brexit regulation will mean more rules, regulation and red-tape or less?”

The chair of Hertfordshire FSB, Pam Charman, isn’t optimistic about how things could go for local SMEs in Hoddesdon. “Recent FSB research showed small business confidence to be at its lowest levels since 2012. FSB members are the backbone of the UK economy and it is crucial that their concerns are put front and centre in the Brexit negotiations, and that we work harder to get start-ups and other businesses to export to new markets. Now, more than ever, UK economic growth rests on the future success of our small businesses, and smaller businesses want access to the European markets, the ability to hire the right people, reassurance on key EU-funded schemes and a new approach to both regulation and de-regulation.”

Keith Grover, MD of HB Accountants advises to keep records to assess how Brexit might be affecting your business. “The feedback from their clients and local contacts is that it is still largely ‘business as usual’ at present, though there is a certain degree of caution about the future. What SMEs need to do is monitor how the business is doing by preparing regular management accounts. We already do this for a number of companies as well as budgeting and acting as a virtual finance director.”

If you would like to explore this area further, please do not hesitate to contact HB Accountants for help with management accounts as well as a range of accounting services, including advice on your growth strategy.

Unless you’re a professional marketer, you may not appreciate how important digital marketing can be for your business. You can take small steps on your own, but if you want to concentrate on making money for your own business, you really do need to put a budget aside to outsource digital marketing to an expert. And this is something you need to discuss with your accountant when drawing up your business plan.

Digital marketing is something that big businesses take very seriously – on average, have increased their spend on search engine optimisation (SEO) and email marketing by over 50% over the past year. Whilst the large corporations are putting aside around 35% of their marketing budget to concentrate on digital marketing, smaller companies and technology concerns are more likely to use 100% of their marketing spend on digital, which is a much more cost-effective way of raising their profile and targeting customers.

So if you are drawing up a business plan, you will need to add a budget for digital marketing – the good news is that a digital strategy will be a lot cheaper than a traditional print marketing strategy, and it also has the potential to reach target customers anywhere in the world.

Why you need to factor in a budget for your digital marketing

There are a number very good reasons why you need to discuss a budget for digital marketing with your accountant when you’re writing your business plan.

According to the latest figures from the Office for National Statistics (ONS), in 2016, 89% of UK households have an internet connection, with 82% of adults using the internet every day, or nearly every day – that’s 41.8 million potential customers.

Social networking shows no sign of slowing down either. It’s probably unsurprising that 91% of 16 to 24-year-olds are active on social networks (Facebook, Twitter, Instagram etc) but even the older age groups are using social media platforms more and more, with 51% of the 55-64s, and even 23% of the over 65s.

Three-quarters of UK adults regularly use their smartphones to access the internet. After emailing, the most popular usage was researching for information about goods and services. When so many people are interested in buying something you’re offering, you need to make sure your offering is one of the first they read about.

What a digital marketing agency can do for your business

A digital marketing agency will ensure that your products or services will be seen online by customers in your target groups. They will ‘optimise’ all the content you post on your website or social media platforms to  help increase the chances that when someone searches for a product or service you offer, your brand will at the top of the search results.

If you want to reach more potential customers, a digital marketing strategy is an absolutely vital part of your business. By including a budget for digital marketing when you’re writing your business plan, you’ll increase your chances of being noticed above the ‘noise’.

Your accountant will be able to help you work out a realistic monthly marketing budget for your company. Contact us if you would like help drawing up your business budgeting plan or an introduction to our own digital marketing agency.

Ambition Broxbourne was only launched in April 2014, but it’s already making a significant difference to the area which has fast become an enterprise zone in its own right. It offers free advice to small businesses, has drawn up a business charter to establish working relationships between businesses and the Council, and has a number of short and long-term targets to encourage and support business start ups. In March this year, it organised a Dragon’s Apprentice Challenge for school students who’ll be the business owners of the future.
But its greatest achievement so far is undoubtedly the Broxbourne Enterprise Centre which is due to open this autumn. At a cost of nearly £4million, the centre is a collaboration between Broxbourne Borough Council and Hertfordshire Local Enterprise Partnership. When it’s finished, it’ll offer 25,00 sq ft of high quality, managed workspaces for small businesses and start-ups.

Flexible office space

Companies will be able to rent office and studio accommodation between 150 sq ft and 500 sq ft, which are complemented by meeting room space, virtual offices, informal breakout areas as well as free parking. To make things easier for small businesses, they will be offered ‘Easy In, Easy Out’ terms which will enable them to move offices within the building quickly and easily, and even leave with as little as two week’s notice, which could mean entrepreneurs staying in business when, under other circumstances, they would have to fold. The Centre will be run by an experienced, specialist company – Basepoint, which already runs similar centres around the south of England.
Rebecca Powell, Regional Manager for Basepoint, said: “The Ambition Broxbourne Business Centre will be an exceptional new facility and will provide sustainable working space for local businesses and entrepreneurs. As well as the outstanding facilities at the centre, we will be hosting networking events for licensees and the wider business community to encourage growth and prosperity in the area.”

We’re looking forward to the boost to local businesses that the opening of the Centre will bring to Hoddesdon and are fully behind the efforts of Ambition Broxbourne. If you are interested in renting office space in the new Broxbourne Enterprise Centre, contact Basepoint direct on 01992 877310 or email broxbourne@basepoint.co.uk.
If you would like advice on any aspect of accountancy, tax and wealth management especially for business start-ups, contact us to arrange an appointment.

When I started working in taxation more than 40 years ago, one of the first things I learned was that there was “no equity in taxation” – either you were taxed by the statute or not.

Lord Clyde in 1929 (paraphrased) said “No man is under the smallest obligation, moral or other, to arrange his affairs as to enable HMRC to put the largest possible shovel in his stores”.

Despite all the recent furore about Panamanian companies, that is still the correct legal position, although there has been a significant element of “moral creep” over the last few years, blurring the line between tax avoidance (which is legal) and tax evasion (which is not).

The moral issue has come to the fore with certain high-profile companies entering into “private” arrangements about how much tax they are prepared to pay to HMRC on complicated arrangements for licensing of intellectual property.

In the UK, HMRC are getting more information supplied direct to them rather than waiting for taxpayers to disclose it. We are all having to be more open with HMRC even if we don’t have to publish our personal tax returns (yet!) like some politicians.

Employment income is notified month by month and banks will provide interest details followed by dividends and rentals from letting agents, leaving perhaps only the self-employed to provide their own information. Even they will by 2018 have to communicate their figures to HMRC on a quarterly basis.

With all this information coming directly to HMRC, will this mean that every taxpayer’s “Digital Tax Account” is accurate? Eventually, maybe, but many errors could arise so in the early days at least, taxpayers will need to watch for mistakes such as someone else’s bank interest appearing in their tax account (how many Mr Smiths are there in the UK?!).

Small businesses play an important role in creating jobs, delivering innovation and helping to drive economic growth. Starting a business may be a major achievement but running it and surviving is an even bigger challenge. For every 10 businesses that are created, the life cycle of 6 businesses is less than 5 years. This can be for any number of reasons, some predictable, and by adapting their behaviour, business owners can increase their chances of success.

The four areas that have the potential to improve the success and survival of start-ups and micro businesses are as follows: Firstly, all small businesses should have a well written business plan to explain why people should buy their products or services, and then monitor progress to ensure that sales not on target are picked up quickly and corrective action taken.

The second area is use of IT. Most small businesses need to embrace the digital opportunities that the internet offers. The website is a window into the products and services they offer, but it should be a low-cost investment.

The third area is good cash flow management. Small businesses should be aware of late payers and build it into their financial planning as well as strengthening relationships with key customers.

Fourthly, SME owners need to adapt to the pressures of running their own business. The key is to accept these pressures as inevitable and to develop the mental agility to respond positively.

The business and industrial centre of Hoddesdon is centred around Pindar Road. The area provides modern industrial units from 500-3,500 square feet in size which are occupied by a wide range of companies that provide goods and services such as warehousing, plant hire, hardware, and even a genotyping laboratory. It also houses Hoddesdon’s public recycling centre.

Ambitious plans for business

In the autumn, office space will become available when the new Ambition Broxbourne Business Centre opens its doors. Funded by Broxbourne Borough Council and Hertfordshire Local Enterprise Partnership, it will provide 65 serviced offices for around 300 people, to support and encourage local start-ups, entrepreneurs, and SMEs. When at full capacity, it’s estimated that the businesses will contribute £20m annually to the local economy, which is great news for Hoddesdon. This is expected to lead to business growth in Pindar road and beyond.

Councillor Mark Mills-Bishop, Leader of the Borough, said: “The Hub will be perfectly placed in Hoddesdon town centre, bringing the Borough’s economic vision and priorities to life, at a local, neighbourhood level”.

The high-quality work spaces will have easy-in, easy-out terms in order to be as flexible as small businesses need to be. It is part of the Council’s commitment to encourage entrepreneurship and help start-ups succeed in order to put Hoddesdon on the map as a place businesses want to be.

Work on the purpose-built Business Centre began in February and is due to be completed in October. The progress of the building work has been captured on time-lapse photography – click here to watch.

Location

Hoddesdon is only a 15-minute drive from the M25, with good access from the A10. It’s in walking distance from Rye House station with regular rail links to Tottenham Hale, London Liverpool Street and Hertford

At HB Accountants, we are great supporters of local businesses and wish the best of luck to all the entrepreneurs and business people who will enjoy the facilities in the Business Centre. If you would like advice on any aspect of accountancy and wealth management, contact us to arrange an appointment.

HB Accountants are so pleased to be attending the FSB Hertfordshire Awards 2016 as finalists in categories Best Customer Service, Training & Development and Apprentice of the Year! As this is our first year of entering awards we are overwhelmed that we have been shortlisted amongst some fantastic businesses.

The team at HB Accountants work extremely hard in providing a high standard service and being nominated for the Best Customer Service award fills us with pride. As a training firm, our apprentices play a big role in the company. With 5 current apprentices at HB Accountants we are thrilled to have been shortlisted for both Training & Development and Apprentice of the Year.

We are looking forward to a fantastic night and wish all finalists the best of luck.

Date: Thursday 23^rd June 7pm
Venue: Manor of Groves Hotel, High Wych, Sawbridgeworth, Herts, CM21 0JU

Supplier relationship management (SRM) is more than just ordering goods or services from third party organisations. To get the best out of your suppliers, it’s essential to create close and collaborative relationships with them. It’s not rocket science – like a good relationship in any situation, your aim should be to work together as a team. We’ve put together a few simple strategies for effective supplier relationship management which could have enormous benefits for your business’s bottom line.

Be your supplier’s customer of choice

Research by accounting giant PwC discovered that cost is the most significant challenge for SRM. Cost reduction is an essential part of the process, but if there’s too much focus purely on costs, you’re in danger of discouraging a longer term, more successful relationship. One US management consultancy survey found that companies which had poor SRM programmes gained no financial benefits from their suppliers. On the other hand, the top 10% of companies which had worked on their relationships “reported an average of $298 million in financial benefits from SRM in the prior year”. So it’s clearly important to work on an excellent working relationship in order to build trust, respect and create a strong bond.

One way to do this is by being open and honest and managing expectations. Involve your suppliers in your processes and make them part of your team; this way, they’ll become a vested partner in your business. Invite them to your office and introduce them to your staff; you could also invite them to join company events which will help build personal relationships between individuals in the two companies. By aligning yourselves in this way, you’ll benefit from improved supplier capabilities in terms of innovation, quality, reliability, risk factor and cost reduction.

Prove you’re a good customer

The easiest and most effective way of doing this is to pay your bills on time! And if, for whatever reason, there will a delay in payment, let them know as soon as possible and give them an indication of when they can expect it. Never order goods or services you haven’t got the budget for – if you need something from your supplier urgently, talk to them honestly so you can come to agreement that will suit both parties. After all, your success is also in your supplier’s interests.

Invest in SRM software

You’re always going to have more than one supplier, and the more you acquire, the harder it’ll be to keep track of them. Having too many will lead to inefficiencies and higher administrative costs. Good software can help your relationship with your suppliers by helping you to manage data and monitor performance. It will also flag up troublesome suppliers – those who are unreliable, deliver late and charge more, enabling you to either work on your relationship with the more inefficient and costly ones, or simply let them go.

For advice on improving your supplier relationship management and improving your efficiency, contact us to make an appointment with an experienced member of our team.

Results of a new survey have shown that small businesses are damaging their chances of growth by not using Key Performance Indicators (KPIs).

Researchers discovered that in 2015, 39% of small businesses failed to reach their growth targets, and 49% didn’t have targets in the first place! On the other hand, 74% of the SMEs that frequently and regularly monitor their KPIs hit their growth targets. Demographically, it is the younger generation who are more likely to use KPIs and also monitor them in real time.

Key Performance Indicators are a vital tool for businesses of all sizes as they provide information about how well (or otherwise) your company is doing. They allow you to identify some of your most important metrics, and provide a standardised way of determining whether or not your staff are meeting their goals, targets and objectives. The majority of KPIs tend to be financial, the most common being average revenue per customer, but they can be used to measure virtually anything.

Monitoring KPIs is a time-consuming process, so if you’re just starting the process, it’s better to begin by tracking just a few meaningful ones. KPIs must have a way of being accurately defined and measured – it’s not good enough to have ‘more sales’ as your target because you’re not quantifying how many sales you’re aiming for.

Common KPIs used by small business owners

• Sales: Most companies generate income via sales. By establishing a sales growth metric, you’ll be able to see the rate at which your revenue is rising or falling. As part of this metric, you must also take into account other factors which will affect the result, e.g. seasonal fluctuations.

• Product performance: By monitoring the performance of individual products and services, you’ll find out how well each performs. By knowing exactly what’s happening, you’ll be able to discontinue those that perform badly and concentrate your efforts on those that do well.
• Return on investment (ROI): All businesses will at some point need to invest money in projects or equipment, the most common being assets and marketing. By monitoring the ROI, you’ll know exactly how much income has been received as a direct result of that investment. In marketing, for instance, ROIs are determined by, for instance, new enquiries or likes on social media, as well as increased sales.
• Debtor lifetime: The interruption of cash flow caused by late payments can be fatal for small businesses. By monitoring how long it takes your customers to pay their invoices can help you with your cash flow forecast, as well as highlight problem clients.
• Creditor lifetime: You also need to monitor how long it takes you to pay your creditors. These KPIs will be comparable with debtor lifetime figures to allow you to avoid taking out too much credit, and with keeping on top of cash flow issues – you don’t want to pay your creditors too quickly if money from your debtors is coming in too slowly.

Small business KPIs are a vital part of your day-to-day business practice. As accountants, part of our job is to help you identify tools which will help your business succeed, whether you’re a start-up or want to expand.

For more than 90 years, HB Accountants have been providing SME owners with financial services and advice throughout the business lifecycle, from start-up, growth and exit strategy. Contact us to find out how we can help you.