Small Business Saturday Blog

Five things all SMEs should know when applying for funding

Monday, February 08 at 15:08Finance | Small Business | Top Tips

1. Business Plan
Never under-estimate the value of producing a comprehensive business plan; it does two things. First, it is a good discipline for the company’s management because it forces them to understand what they need, to think about why they need it and in what form; e.g. should they be looking for an overdraft or a term loan?

Second, and most important of all, it demonstrates to a lender that the management understands its business and takes the lending process seriously.

2. Understand your cashflow
A realistic cashflow forecast is probably the most crucial element in a business’s financial arsenal. Understanding where the cash goes allows a business to identify what the money is needed for. It might be to finance growth through the purchase of machinery or another asset, or to provide day- to-day working capital? Either way, you can guarantee that the lender will need assurance that (a) you understand what the money is needed for, how much and for how long and (b) that your business will generate sufficient surplus to pay the money back when you say you will.

3. Know when to apply to funding

Often new or small businesses wait too long to apply for funding, resulting in the business being put under financial pressure and making a rushed decision that could end in a poor choice of lender or type of finance; e.g. in certain circumstances, a term loan could be a better solution than, say, invoice discounting, or vice versa. Going with a lender that can get the job done quickly is just one aspect; other considerations include the level of flexibility the lender can extend you in terms of repayments and the cost of the finance.

4. Know the funding market

With increasingly niche funding solutions available, businesses may need an adviser they can call on for advice and market knowledge, directing them to the right type of financing for their short, medium and long term needs. 

Historically, this adviser may have been a bank manager or accountant, but a growing business should also consider a commercial finance broker, as the expansion of the Alternative Finance sector has meant more funding options than ever are open to SMEs. A good adviser will understand the market and steer you towards the right lender and the most appropriate type of funding to suit your particular circumstances.

An alternative way to search for an appropriate lender is to use the aggregators’ site. Typically they offer no advice but highlight appropriate lending products for an SME’s requirements.

5. Don’t be afraid to shop around
Being turned down for funding by your own bank does not have to be the end of the story. There is a whole new generation of lenders in the marketplace who may be able to help you. The new lenders can move quickly and thoroughly. Make sure your lender is transparent with costs, personal in approach and takes the time to understand your business. Don’t be afraid to look around the market, possibly with the help of a reputable finance broker.

Written by Credit4. Visit their homepage or call 020 3637 0570 for further information.

Don’t miss the Small Business Saturday Inspire Series, ‘Accessing finance for your small business’ a free workshop on 9th February. Register here or follow @SmallBizSatUK for updates.

Finding alternative sources of finance for your small business

Thursday, December 17 at 16:04Finance | Top Tips

With 73% of SME owners aiming to grow their business over the next two to three years, the demand for funding has never been higher. The daunting task of finding funding can be confusing and many SMEs are not the right fit for traditional bank funding. There are an increasing number of alternative funding platforms available and small business owners have the opportunity to flourish even without funding from the banks.

The next task? Finding the right funding for your business. Alternative finance has become a competitive market with a variety of lending types and lending platforms so don’t rush into anything. Finding the appropriate funding may seem a lengthy and confusing process, but there are ways to ease the journey:

1. Plan ahead
Make sure you’ve got a solid business plan and be meticulous about your numbers - estimates and approximations simply won’t cut it. An accurate plan will highlight exactly how much money you need and where the money needs to go. There are over a hundred alternative funding platforms, some of which specialise in particularly niche areas of business, so a detailed plan will point you in the right direction from the outset. Verify your facts and figures in order to ensure that you don’t fall at the first hurdle.

2. Organise your financial documents
When approaching alternative funding platforms, having your financial documents organised and at the ready will ease the process and you’ll receive funding much sooner. Whilst these lending platforms are not as restrictive as the banks, it is still important that you provide accurate information such as bank statements, VAT returns and company accounts so that they can help you in the most effective way. Try to have important figures at your fingertips: What does your business turn over annually? What is your business’ credit status? How many sales do you process with credit/debit cards? It’s a good idea to keep track of your company’s data and work out a system for organising important financial documents. It may seem a dull task, but it will be worth it and funding platforms will take you seriously.

3. Be realistic
It’s vital to remain realistic about your financial abilities when exploring your funding options. Committing to an oversized loan will only cause unnecessary stress when it comes to paying it off at the end of each month. A loan should serve as a benefit not a burden, so examine your figures to work out the amount of funding that you can comfortably pay back each month. Precise planning should provide a realistic indication of how much money you need to help your business grow without causing financial strain.

4. Understand and compare your options
Don’t rush! The variety of funding platforms in the industry is great news for SMEs but the immense quantity of them can also be overwhelming. There are so many platforms to choose from so make sure you take time to weigh up your options and don’t rush into the first lender you come across. It has become a fiercely competitive market so check through your options with an intermediary or by contacting the lenders directly for reassurance of your decision.

Fundbird is here to help you navigate and find your way around the various alternative lenders. Through using our online platform, SMES will be directed to the best matched lender based on their business needs. Fundbird provides free tools that can help you with this process, including an e-book, personal consultatation and online matching to help you find a lender via the website

A Pension Solution for small businesses tackling automatic enrolment

Tuesday, December 01 at 10:11Finance | Quick Guide | Small Business | Small Business Saturday | Small Business Saturday 2015 | Top Tips

Joanne Segars, Chief Executive of The Pensions and Lifetime Savings Association, highlights how small businesses can prepare for automatic enrolment.

Automatic enrolment will require every UK employer to put certain staff into a pension scheme and contribute towards it. We know this may seem a daunting task, which is why we've launched Pension Solution. It has been designed specifically for small employers, to take the hard work out of implementing a workplace pension scheme for the first time.

Planning and preparing for automatic enrolment means thinking ahead: what you need, and whose help will make it easier to complete key tasks and estimate costs. These are the key steps I’d recommend to take when getting your small business ready for automatic enrolment:

  • Find out your staging and declaration date  using your PAYE reference from The Pension Regulator’s website
  • Go through a step by step guide to setting up, get familiar with what automatic enrolment means for you and your workplace.
  • Research and select a pension provider that suits your needs
  • Communicate and explain how automatic enrolment will affect your workforce 

Pension Solution helps with each of these steps. The online service will provide the know-how and tools you need to tackle automatic enrolment confidently and successfully. We also offer access to a free half-day face to face training course for those who prefer the human touch.

We’re delighted to be supporting Small Business Saturday for the first time this year because we recognise the vital role small businesses play in the UK economy.

Over 67,ooo employers have already enrolled their staff into a workplace pension, with 5.5million employees now benefitting from a workplace pension and saving for retirement. 1.8 million small and micro employer workers will now join over the next three years if they earn £10,000 or more a year, increasing the amount that is being saved in workplace pensions by around £15 billion a year, according to the DWP Automatic Enrolment evaluation report 2015.

Through Pension Solution we are bringing 90 years of expertise in workplace pensions to help small businesses through automatic enrolment and beyond. It is our status as an independent not-for-profit trade organisation with an impartial view that makes us different.

Automatic enrolment is our best chance of getting the nation into the habit of saving for retirement, and we must focus on making the process as straightforward as possible for small businesses like you in particular.

Pension Solution does just that and we warmly invite you to join our membership on Small Business Saturday so that we can help, represent and work for you.

The Pensions and Lifetime Savings Association will be supporting Small Business Saturday UK on 5th December 2015 by offering a 70% discount on the normal £49 subscription to join Pension Solution as a member. Use voucher code BIZSAT1 when joining online. Follow us on Twitter: @SolutionPension

How To: Crowdfunding for a Small Business

Tuesday, May 26 at 13:14Crowdfunding | Finance | How To | Inspiration | Small Business

For those who aren’t familiar crowdfunding is a new option to raise money by reaching out to the ‘crowd’, i.e. everyone online. You are able to gather funding to expand your business, or to embark on a new small business venture.

2013 saw crowdfunding raise £666 million in the UK, with that figure increasing to £1.7 billion in 2014. Crowdfunding is a particularly useful tool for small businesses that have difficulty finding funding from traditional sources.

In the US, a crowdfunding success story is the Pebble Smartwatch, whose campaign raised over $20 million. Recently in the UK, Scottish company BrewDog received £5 million through crowdfunding with their Equity for Punks campaign, with the goal of financing their business with support from happy customers. Crowdfunding is a fantastic opportunity to grow your business if you set up your crowdfunding campaign in the right way.

Be a Celebrity

You already have supporters. If you’re considering growing your business there are already customers who like how-and-what you do. Reach out to these customers along with your family and friends; offer them the opportunity to become more involved in the company to their own benefit as well as yours. These supporters are your advocates. Potential investors who don’t know you personally will see that they trust and value your company enough to invest, making them more likely to do so as well.

Be a Person

A crowdfunding campaign is about working together with your supporters to expand. To do this well you need to be a person: approachable and identifiable. Simply put, people are more likely to trust and invest in a company made up of people they can identify with.

Be Professional

That’s not to say there’s no place for facts and figure. Alongside your charming self they’re a valuable tool for someone to decide whether or not to hand over their money. Particularly to those bringing larger amounts of investment that might not know you, it’s important to present your professional side and display the business acumen behind your success.

Be Open

Explain what the project is for- in detail. Tell your supporters how the funds raised will be spent on new equipment, more staff, or extra retail and operating space. Tell them how this will increase business and tell them how that will allow you to repay their investment. Crowdfunding allows for a truly symbiotic relationship. Small businesses are able to find funding under fair terms and supporters benefit from the success of the small business; local investors will also enjoy the improvements to your business.

Be Ready

Crowdfunding provides great access to potential investors and simplifies investing in your business but there’s still work involved. Before the campaign begins, things already need to be in motion. Arrange interviews or reviews that will be available before and during your campaign to attract interest. Have updates ready to be sent out when you reach your goals; thanking the investors and explaining how those funds will be used. Be sure you have social media accounts set up, where you can post these updates and interact with your supporters.

Crowdfunding  requires effort, energy and focus. But with a good pitch and some preparation you can expand your business on your terms. If you want to start up a new venture or develop your business further go to to learn more.

By Sam Hemming from, a crowdfunding company where you choose the best option for you with complete control over your campaign’s length, target and return on investment as well as multiple funding options to suit you.

Tips to create instant cash flow for your small business

Friday, March 27 at 09:33Finance | Start-Up Support

It’s been a good year for small businesses. While the future looks incredibly bright for SMEs, there is still a need to proceed with caution. We all know how quickly the financial landscape can shift and you certainly don’t want to be left without anything to show for all your hard work. With this in mind, we have put together a list of all the resourceful ways that you can save money for your business and trigger a quick cash flow boost.

By carrying out these tips, you should be on track to saving your business a substantial amount of money, which can then be put back into your business to help it grow and become even better by the end of 2015.

Adopt testimonials and referrals over advertising

Positive testimonials from happy clients and customers are a fantastic way to build up a strong brand reputation and encourage people to use your services without splashing out on expensive advertising. Add quotes and comments from happy customers to your website and you should start to see the leads roll in.

If you have a great relationship with another business, don’t be afraid to ask for referrals. If your product is worthwhile, businesses won’t mind telling others about it. Return the favour and make it worth their while too. Often, some clever content marketing and solid relationship management can be far more cost-effective than advertising.

Make the switch to a new tariff or supplier 

There’s no doubt about it, businesses use huge amounts of energy. If you haven’t switched energy suppliers or tariffs before then your energy bill may be more expensive than it could be.

New regulations have made it even easier for businesses to switch energy suppliers, but first you need to shop around and find the cheapest deal for you. You can compare hundreds of energy tariffs and rates using energy price comparison sites, such as Love Energy Savings, and if you find a better deal then they can switch you over at no extra cost.

Buy refurbished equipment 

There’s no reason why you need brand new pieces of equipment. Take a look online and you will find a vast collection of refurbished computers, printers and photocopiers for half the price of the new equipment. Choose a model that you know has been restored to the highest quality and one that comes with a warranty, just in case something does occur. They say that technology is one area in which you cannot afford to skimp on, but while this may be true, it doesn’t hurt to dig around for the most cost-effective solutions.

Get involved with work experience and internship programs 

Seeking help from young students or university graduates is a fantastic way to help others; build up a strong brand reputation for your business and ultimately cut costs. When you take on a work experience student you are able to provide them with valuable industry knowledge and in return they allow you to become more productive, as they help with day-to-day tasks for free. Everyone benefits.

Print green

If using high quality paper and cartridges isn’t necessary for your business, you should definitely switch to the recycled option. You can save great amounts of money by using recycled alternatives and as you are doing your bit for the environment, why not market your business as green? A hugely desirable quality for any business nowadays.

Phil Foster is the CEO of Love Energy Savings, a business who take great pride in supporting UK SMEs, helping them to make much need savings on their energy bills.

Actionable Financial Advice for Startups

Wednesday, March 25 at 11:09Finance | Start-Up Support

If you’re a budding entrepreneur with aspirations of starting your own business, there are a number of things that you’ll need to consider before embarking on a new venture. The most important of which is the finance needed to set up a business and to make it work.

Below we have outlined the areas of finance that you’ll need to keep in mind when setting up a new business, the financial aspects of running a business, as well as the finances associated with hiring employees.

Starting out

One of the common causes for the failure of new businesses is the simple fact that they run out of money. In order to avoid finding yourself in this predicament it’s imperative that you make financial planning a priority when making the decision to start your own business.

Start by creating a plan that covers the first 12 months of your business (this is often the hardest time). Focus on financial projections and forecast the expenses of setting up the business, any ongoing costs (office rental, IT, HR, etc.) and the time it will take to recoup this capital. You need to be aware of the resources needed to stay afloat if things don’t go to plan, as well as having the resources available to pay suppliers.

Before starting out on a new business venture you should have visibility over your available resources as well as a clear picture of the money needed to make the startup work (even if the business doesn’t at first!). Plan your budget and stick to it.

Running the business

Financial planning is integral when setting up a new business, but nothing will prepare you for experience when employees, paperwork and customers are thrown into the mix. You may have a solid plan and budget, but that means nothing if you don’t track the money coming in and going out of the business.

In order to account for your money, establish a simple accounting system. It is vital that you start doing this from the day you start your business. You need to record all of your financial information so that it’s readily available if it’s ever requested to be seen by banks or investors, as well as being in order when it comes to doing your taxes.

There are a great many businesses that manage their own accounts, but not every entrepreneurs circumstances are the same. If you ever experience difficulties when it comes to handling and recording your finances, seek advice from a financial advisor, and if your budget can accommodate you could also invest in the services of a bookkeeper or an accountant.

Managing your team

There are a number of ways to save money when you first start a business, from making savings by working from home or renting shared office space, but another way to save is to keep your team both scalable and flexible. Rather than hiring people to perform each task needed for your business to function, try using freelancers who can do the work as and when it’s needed. This is a viable way of overspending on staff as your business finds its feet.

Once you do start building your team, you will need to get them on the payroll. There are a number of free and paid-for payroll software solutions that are recognised by the HMRC. On the topic of payroll, don’t forget to pay yourself. It’s a slippery slope when you decide to forego paying yourself in order to concentrate all funds back into the business. Even if it’s just a little, make sure you get paid a salary.

We hope that this has provided you with actionable advice when it comes to the finances of setting up and managing a new business.

Author Bio: Stephen Verber specialises in corporate finance and heads up the forensic accounting department at Alexander & Co. Stephen is also a member of The Academy of Experts.

4 Tips for buying your very own small business

Tuesday, March 10 at 09:28Finance | Inspiration

For many, it’s a long-held dream. Owning a business could give you the freedom to pursue your professional passion, to be your own boss and to grow a brand to be proud of. Whatever your motivation, starting your very own business is an exciting time.

Building your business from scratch can be rewarding but it may make better sense to buy a business with an established customer base that’s already supplying cash flow and profits. It’s likely to be more costly – in the short term at least – but you’ll be generating a revenue from the get-go and you should find it easier to obtain finance, as your bank or backer will be investing in a business with a track record and orders in the pipeline.

It all starts with you

Start by taking time to think long and hard about the type of business you want. You may be considering basing your new career on a personal talent or hobby – landscape gardening or dressmaking, for instance. As long as you plan realistically and conduct due diligence, there’s no reason why you shouldn’t build a business around a passion, after all, countless others have.

Do carefully weigh up your own skills and expertise, though. If you don’t know the first thing about early-years education, you might face a steep learning curve if you plan on running a pre-school nursery. Consider re-training if you’re aiming for a big career change and try to select a business that will make the most of your personal qualities – as well as one that dovetails with your lifestyle. If you’d rather stay indoors when wet weather descends, an outdoor activity centre may not be the right choice for you!

Take your pick

When you’ve narrowed down your search by business type, size and location, you’re ready to begin your search in earnest. Business transfer resources like Bizdaq help you get a head start but you should also keep your ear to the ground for local intelligence on businesses that may never make it to the open market. Talk to business owners and use your network of contacts to make sure you’re the first to know about new opportunities. Bear in mind the budget you have available.

Do your research

Bone up on your chosen market and try to get a feel for its economic outlook. No business is bomb-proof, but you want to feel the tide is with you rather than against you. Make sure you assemble an ‘acquisition team’ to help perform due diligence on your purchase – your solicitor, accountant and financer (if you have one). Start by digging into the business’s finances, reputation and trading history. See if you can discover why the owner is selling, what the potential for growth is and if it carries any liabilities.

At the end of the process, you should know exactly what you’re buying, which, in turn, will help you to decide if the price is right.

Closing the deal

Agreeing a price is just part of the negotiating process. Decide what kind of deal structure would best suit your circumstances and look carefully at your options. If you need finance to go ahead with your purchase, consider the most cost-effective way of acquiring the necessary backing. A straight business loan may work well but you could discuss alternative funding options with the seller - such as deferred payments or seller financing.

The right business is one that will grow because of your personal and professional strengths and blossom under your stewardship. So take the time to find it, heed the professional advice you’re given and keep the seller on side to ensure a smooth transition on D-Day. Be honest, play fair, work hard and you’ll soon be running your business like a pro. Good luck!

Jonathan Russell is Marketing Manager at Bizdaq, an online platform that helps people easily buy and sell small businesses in the UK

5 Ways To Improve Cashflow for Small Businesses

Friday, February 20 at 13:56Finance

As a small business owner you understand that healthy cashflow is essential. Yet, all businesses, no matter how big, will face times in their life cycle when they are squeezed for cash. The question is how best to prevent these situations and keep your business on track to achieve its objectives.

Cashflow management is a skill and one that any business owner can pick up through practice.

We’ve compiled these 5 easy tips to help all small business owners improve their cashflow situation – read on.

      1. Be clear on when payments are leaving your account and when you expect money to be entering your account

Know when you have to cover crucial costs such as staff wages, quarterly rents and tax obligations. Ensure you organise a schedule that works for you i.e. when you expect to have cash in your account. It may sound simple but the reality is often far from it.

A great method to ease payment pressure is to negotiate a fair amount of time to pay your suppliers, such as 7 days or 30 days. Another way is to arrange credit terms that allow for staged payments; it is aways worthwhile to ask what’s possible in business.

2. Get on top of your finances and use all of your resources

Financial control is essential to manage your cashflow. Where can you afford to cut costs? What service is not having the return on investment you expected? If you’re a retailer, for example, and you are purchasing tonnes of new stock – have you used all of your current stock? Don’t forget the option to upcycle your inventory so you are making the best use of all your assets. Reducing unncessary expenditure will improve your cashflow position.

3. Be proactive with customers who delay payments

This is true particularly with those customers who make up a large portion of your revenue. While they may place the largest orders, if they pay late it will become a big problem.  Remember, the bigger the customer, the bigger the potential impact on your cashflow from delayed payments.

Ultimately, customers need to stick to their set terms, and you should be quick to spot customer trends that suggest they may be having trouble paying or are constantly delaying. You can buy credit control services for small businesses which can help identify these trends, allowing you to keep firmly on top of any issues.

4. Finance the gap in between your payments

Raising finance from your invoices is a popular solution to keep your business cash rich. Put simply, you use your unpaid invoices to get cash from banks or invoice financiers for a fee. The cash advanced or borrowed from your invoices is an agreed percentage of the invoice value. This means you don’t get the full amount upfront but you do get a healthy chunk immediately. When the customer pays the invoice in full, the payment will go via your business to the invoice financier. To assess if it’s possible for your business, you should always speak to a finance professional about the terms and costs available from the different providers, and what your current margins would allow you to afford. If it’s possible, it is a viable option used by many businesses to improve their cashflow.

5. Apply for overdrafts or rolling facilities

These finance products, from banks and non-banks, are designed so that you can dip into your account and cover payments as and when you need. You pay a small fee to have access to the funds and then you pay for the funds that you actually use.

They provide great peace of mind from always having funds in your account for unforeseen payments.  

If your business cannot get access to a traditional overdraft from your bank, don’t be disheartened. New alternative finance providers have introduced rolling credit facilities which act in a similar vein to overdafts. They come at a greater cost with regards to the rates you pay for drawndown funds, but then there is the added benefit of speed and flexibility; you receive the funds straight into your account much quicker than the lengthy process associated with bank overdrafts.

Following these simple tips can be an effective way to improve your cashflow position in the business. We hope you find them useful.

This article was written by Satnaam Dusanj, Account Manager at Funding Options Limited

Local Financial Advisor?

Friday, February 13 at 11:10Finance

Starting a business – Why financial advice matters. 

Setting up your own business can be an exciting undertaking and the realisation of a lifelong ambition. It can also be daunting, complicated and fraught with tedious but essential administration. Attempting to navigate the many responsibilities involved with an SME start-up without expert assistance can place you on the back foot before you’ve even started trading. Working with a financial advisor can not only reduce your workload, it can also help you to avoid legal and financial pitfalls that may prove costly down the line.

Why an independent financial advisor?

There are a number of resources you can use for advice and guidance when it comes to starting your own business, from your local bank to various government schemes and services. While these services can offer excellent guidance and access to funding, an independent financial advisor can also offer dedicated long-term support based on a complete understanding of your business needs.

IFAs can offer informed, impartial advice and recommendations based on a complete analysis of the market you’re operating in. This can include helping you to find other third party specialists such as accountants, payroll companies and insurance brokers.

Most people go into business because they feel passionate about the market they’re entering. Working with a financial advisor can help you to keep the background essentials running smoothly while you focus on the day-to-day elements of making your company succeed.

How an advisor can help

Tax Management – Keeping your taxes in order can be a time consuming headache for any business leader. A financial advisor can offer guidance on making your business as tax-efficient as possible, keep you abreast of changes to tax legislation and identify opportunities to bring tax benefits to your company.

Insurance – From employer and public liability to theft and damages, there’s a lot that can go wrong when you’re a business leader. Anticipating and mitigating potential threats is an essential element of setting up and maintaining a healthy company. An IFA can help you to identify all the risks you might need to cover, before exploring the market for the best value quotes from insurance providers.

Pensions & Auto Enrolment – By 2018, all UK employers will be obliged to provide a workplace pension to which staff will be automatically enrolled. An IFA can help you to understand the requirements of Auto Enrolment, and assist you in setting up an appropriate scheme for your company.

Employee Benefits – To attract and retain high quality staff, it’s important to make your company an attractive place to work. In addition to offering a generous salary, many businesses offer employee benefits. These can range from health insurance and gym memberships to company cars and product discounts. Many of these benefits have tax benefits, and need to be run according to certain guidelines. An IFA can help you to understand which incentives could make sense for your business, and assist you in the set-up and administration.

Structuring your business – Setting up your business structure and registering as either a Sole Trader, a Limited Company or a Partnership is a fundamental decision that can have major legal and financial implications for the future of your enterprise. An IFA can guide you through this process, identifying any risks and ensuring your company is well positioned for future growth.

Business Premises – Finding an appropriate base of operations is an essential part of launching a new business. Whether you need offices, industrial space or a well-located store, an IFA can help you to balance your business needs against your budget. They can also help you to get the best quotes for commercial property insurance.

Finding an Advisor
To ensure that you’re receiving impartial, professionally qualified business advice, you should only speak to an FCA-authorised IFA with a minimum level 4 qualification in financial planning or similar. You can confirm your IFA’s regulated status by checking against the FCA’s free online Financial Services Register.

Most advisors will offer a free initial consultation to gain an understanding of your situation. Based on this consultation, your IFA will usually put together a proposed plan of action, including a full breakdown of costs for their service.

With all the other costs associated with starting up a business, working with an IFA may seem like an expensive luxury. However, it’s important to bear in mind that a good IFA should be worth more than the cost of their services in the long run, and the decisions you make now will affect your profitability throughout the life of your enterprise.

By John Lucas 

John is the content marketing manager for Local Financial Advice, a free service connecting individuals and SMEs with FCA-regulated independent financial advisors. 


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