The Employment Tax laws are changing again, and they will take place from 6th April 2018. It is important that all employers are aware of these changes and consider how this will impact your company. You should also make any necessary communication with your staff.

 

Auto Enrolment

All employers will have to provide a workplace pension for all staff members that qualify by the April 2018 deadline and most already do.

Take a look at the table below to see the minimum contributions that must be met by both the employer and employee:
 

 

 Minimum Employer Contribution

 Minimum Employee Contribution

 Total Minimum Contribution

 Currently

 1%

 1%

 2%

 6th April 2018

 2%

 3%

 5%


For more information on work place pension please visit the gov.uk website or click here

 

National Minimum Wage and Living Wage

There are different hourly rates of National Minimum Wage and this depends on the age of the members of your team. If staff are 25 years and over, then they will get the National Living Wage. As an employer you are legally obliged to pay the National Minimum and Living Wage.
 

 

 25 and over

21 to 24

18 to 20

Under 18

Apprentice

 Currently

£7.50

£7.05

£5.60

£4.05

£3.50

 1st April 2018

£7.83

£7.38

£5.90

£4.20

£3.70


Apprentices are entitled to the apprentice rate if they're either aged under 19, or, aged 19 or over and in first year of apprenticeship. Apprentices are entitled to the minimum wage for their age if they are both aged 19 or over and have completed the first year of their apprenticeship. More information can be found here or if you want to see previous years minimum hourly rates

 

If you would like to speak about these changes that are to come in to place or what steps you need to take, then please call us on 02920 653995

I see alot of business owners going into owning a business and under selling themselves.  

We all have different reasons for going into business.   You might be looking to be in charge of your own destiny.  You have a great idea that youve always wanted to pursue.  You lost your job and want to create your own or have a redundancy package that you want to re-invest.

Whatever your reason use these tips below as at the end of day,  if youre not making a profit your dreams and aspirations fall by the way side.

Protect Your Margin

Your margin should be enough that it not only covers the direct cost of your product or service materials and labour, but allows you to make a profit to cover overheads and leave a profit/ or income for yourself to grow and develop the company.

There is a market price for every kind of product or service, ie what your customers will pay for your product or service.  Stay ahead of the competition, know what they are doing, offer something different to stand yourself apart.

The margin itself

Costing your product or service is a vital project in itself. 

Be aware of the percentages your industry can attain.  If your in the food industry aim for a minimum of 3 x your costs, manufacturing products maybe lower between 60 and 100% depending on your product or market.

If you are making a product, Costs include
Materials, Labour, Energy

Keep this exercise in mind at regular intervals, at least every six months.  Energy and cost of materials do fluctuate, you need to be on top of that.

For the labour cost, time yourself making the product, as you get busier, look at ways of saving time.

Ie a machine might do the job faster than you, you might be able to buy in part of the process.

Manufacturing sites, keep a close eye on this with the use of computerised stock systems, using either FIFO or Standard Costing methods.  They see first hand any fluctuations, look into any big fluctuations, up or down.

You can also replicate this using a manual method .

Service Provider
Your service is likely to be mainly labour cost.

Experience and judgement always help when costing up a particular job.  But always keep an eye on the actual time it has taken to complete the exercise.  Keep timesheets at all times and for everything connected with that client.  You will be building up a record in order to raise the sales invoice, plus you will be staying up to date and applying realistic costs when quoting for work.

Cost savings

Save yourself cost of sale by buying direct from the Wholesaler, negotiating the prices.  More volume should equal better discounts.

Try and buy local where you can, your carriage costs could be saved.

Saving labour time, by knowing  your time elements to the job, using machinery where possible.  Time management.

Don’t price yourself too cheap.  Remember you need to be selling at a profit.

Offer added value and up sale marketing, to make higher margins.

Split your products up by margin, ie get the selling mix right, volume on lower margin, less of the higher margin.   

What constraints do you have
Do you have only limited capacity of manufacturing space, limited number of appointments available put day.  Put this into your budget, not just numbers.

If you can improve your margin to a realistic target, you will see the positive result on your bottom line, and hopefully in your pocket too.

Set yourself goals, you can always do better.  Keep that mind set, it’s a great planning tool.

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own.  It is not intended to be used to make all of your business decisions but as a guide only.

 

 

We covered looking at your balance sheet some time ago, and wanted to refresh you on why it is so important.

Building up your balance sheet can help you with your future with the business, if you were ever to sell your company on to a potential buyer, this is an important area that the buyer will be looking at.

Its not just about profitability and turnover, the balance sheet is an indication that you are growing your branding, a business that has thought about strengthing and building up the balance sheet is worth considerably more than one that focuses just in the present.  ie turnover and profit.

The example we have below, is fine for a small business and will probably have a good credit score as its positive in both the net current assets (Working Capital) and the overal value.

But if youre talking about a business thats worth selling you are going to need a plan, this could be a 5-10 year plan, its certainly not short term.

Will need to be assets in both the fixed assets sections and current assets, this could be by buying equipment or machinery to make yourself more efficient and do a higher volume, buying a company with skills or equipment that brings Goodwill into the assets section, quite a lot of larger companies do this, they purchase mailing lists, and client lists, from smaller companies, to rapidly increase their net worth, and increase turnover.  

Current assets would be building up your turnover, and therefore your debtors increasing. Keeping an all important eye on the costs, and keeping the creditors to a reasonable level.

Long term liabilities are usually loans that are paid more than one year ahead, and maybe the director loans, if the owner hasnt taken back all of their investment.

The balance sheet value needs to increase tenfold, and self sacrifice for the owner is a must for this kind of exercise.  Its not all about your current year anymore, but your long term future, and future sales opportunity.  Think of it as a potential pension plan?  Investment for the house by the sea, whatever your dream future this is your opportunity to make it a reality.

 


 

 

 

balance sheet

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own. It is not intended to be used to make all of your business decisions but as a guide only.

What to do with your business if things have quietened down over summer

This may not be affecting you, but a lot of businesses suffer at some point during the year from seasonality or the great British weather affecting the productivity of their business.

Ive worked in the travel industry where if the weather is too good the telephone stops ringing, but Boxing Day the phone lines are maxed out.

Manufacturing tend to have a shut down over Christmas etc.

Everybody seems to be on holiday in July and August!

This might be adhoc or happens the same time every year, you know its going to happen, so planning ahead for that potential sales fall is vital to keep the operation moving and generating income for when the good times come back.

Keeping a buffer in the bank account certainly helps, you may need to scale back for a short period of time.

But for an ever growing business you are not going to want to scale back you want to keep on going.

Increase the marketing, do a special offer to either get things moving again in the Autumn, or get things moving now. The choice is up to you, but you are going to have to do something about it. Sitting on your laurels will not generate that income.

Use the time to look at your operation, are there systems you can tighten up on, costs to trim down. Think efficiency all the time, if you can do it better, add value, or save some time, its all a good thing.

Or a topical word at the moment, Collaboration. Get together with your network, maybe a couple of you have connected skills, and can promote each other, or do an event together and share the proceeds. What have you got to lose.

The important thing is to not sit back and wait for it to come, you make it happen.

 

 

 

 

 

 

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own. It is not intended to be used to make all of your business decisions but as a guide only.

Employing a new member of staff can be a scary thought for any employer even the most experienced ones. Will that person fit in with the team, can they do the job, what will they cost me.

It depends on what type of job you are trying to fill as to how strict you need to make the interview process.

A lower paid non responsible role might be at minimum wage whereas a manager or professionally experienced person might be at a much higher salary so you need to make changes as far as getting the right candidates to apply. Be clear from the outset what it is that you want. Do you need a full time or part time person, is the job permanent or casual.

Put together a job specification which will list all of the jobs and responsibilities the person has. Do they need specific qualifications to do the job.

A person specification this is where you are looking at the personality of the person, the experience that is required, what type of specific jobs are they essentially needed to be experienced in, to get a chance of an interview.

Grade every candidate with a score depending on how they fit with your specification above, it’s a little more time consuming but will quickly discard candidates who don’t fit your requirements.

The interview make a list of questions you need to ask and try and encourage the person in front of you to open up and talk about their experience. This will allow you a small insight into their personality.

If this is a role for an experienced or technical job, then give them a test as well as a person to person interview. I tend to do a test at the end of the interview when the candidate is all relaxed. They are more likely to be calm when you are in discussion with them.

Check references always, don’t take anyone on face value, and if you have other members of staff introduce the person at the interview. Other employees feedback is always helpful as at the end of the day they need to fit in with your already established team.

Give them a contract of employment this is required by law, even a casual member of staff is entitled to holiday pay.

An employee is controlled by the terms of their contract with you. You can allocate them any job that is within the remit of their employment.

They tend to be cheaper than a subcontractor but you are responsible for handing over their income tax and national insurance contributions. Plus Employers NI which is currently 13.8% above the lower rate earnings.

They are entitled to holiday pay

Entitled to pension under the new scheme automatic enrollment

There is more chance of loyalty from an employee as you are providing them with their main work

Outsourcing A Subcontractor

This can be useful if you only have a need for a small pocket of time for a particular project or contract. As you are not offering a permanent role.

They tend to be slightly more expensive than an employee as they are responsible for their own income tax and national insurance.

You can expect them to be able to do the task in hand as they are likely to be experienced in that particular field you are employing them for.

You do not control what they do, but should expect a reasonable level of professionalism and expertise.

They are not entitled to holiday pay or sick leave or pension.

They are likely to be working for other people so other than a commitment in a contract you might be waiting for work to be done.

Recruiting someone in this capacity should like employment be done on the basis that they will fit in with the team and that they can do the job effectively. They are not entitled to redundancy payment

 

 

 

 

 

 

This blog is intended for information purposes only, you may have your own suggestions.  Use this a guide only