A guide to the business services offered by: Also Trading As Really Useful Brokers Really Useful Factoring. 1 P a g e

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1 A guide to the business services offered by: Also Trading As Really Useful Brokers Really Useful Factoring 1 P a g e

2 Contents Useful business contacts Business & Strategic Planning is not just for big business Funding Business Grants - Enterprise Finance Guarantee Scheme (EFG) Small Loans for Business Cash Flow Finance Asset Based Lending Unsecured Business Finance Managing Cash, using cash flow forecasts Managing your cash flow Simple Cash Flow Forecasting Outsourcing Business Development Management Sale Process Management Database Contact Management 2 P a g e

3 Useful contacts Forshaw Associates Limited Commercial Finance Carl Bradshaw - Business Development Manager T: E: carl@really-useful-brokers.co.uk Websites Positive Business Development Freelance Business Development T: E: positive@carlbradshaw.co.uk W: Business Link T: HMRC (Inland Revenue) New Company Registration Click Here Limited Company Formations Really Useful Brokers T: E: form@really-useful-brokers.co.uk 3 P a g e

4 Business & Strategic Planning is not just for big business As more and more bad news for businesses has unfolded, business owners are feeling the pinch. A meltdown in the financial sector, severe weakening of the pound and high street banks unwillingness to lend often looking to reduce existing borrowing facilities combined with increased fees and rates, means that business face both higher costs and a deep recession. Ignoring the situation will not make it go away and businesses need to take action now to minimise the effects. It is recommended that your business has a detailed strategic business plan to support it through these hardening times. This plan should be able to: Demonstrate Be prepared to demonstrate to your bank manager that you are on top of your business finances. Make sure you have adequate Management Information (MI), cash flow forecasts and a solid business plan which shows where the business is and where you want it to be in the next 12 months (be realistic with your expectations). Identify By developing your strategic business plan you will be able to identify your businesses strengths and weaknesses and in turn your businesses opportunities. Set realistic objectives both in the short and long term and use this to gauge your progress to achievements. Review Frequently review your current banking arrangements, terms of credit both with your suppliers and clients/customers. 4 P a g e

5 When looking at your banking arrangements take stock of the services you are paying for and compare them against the ones that you use and the services you would like your bankers to provide. Funding your business Since the beginning of the credit crunch banks have been tightening their belts where lending to small business is concerned. As the number of competitive banks reduces on the high street, what does this mean for competition for small business banking? We are now seeing more strict lending criteria from a reduced number of banks/lenders and as a result business may find that more traditional sources of funding are no longer available to them. However, there are other options available. Not all of these options will be suitable for everyone but, if you use your strategic business plan with a financially sound business; funding options can be found. Part of the services we offer at Forshaw Associates Limited include writing a detailed business plans and assisting in the creation of a realistic cash flow forecasts, discussing with you the most suitable options for your needs and introducing you to the lenders in the market place who can satisfy your requirements. Grants This type of funding is available for both business start ups and for the development of existing businesses. Grants usually only cover a proportion of the costs for a specific project (i.e. Website design, marketing plan etc) providing that certain conditions are met. For more information on grants for your specific location or industry please ask. Enterprise Finance Guarantee (EFG) previously the Small Firms Loan Guarantee (SMLG) As a small to medium-sized enterprise, you may have viable business plans that need funding and for which a loan would be appropriate. However, you may be struggling to access the finance or working capital required because of the additional risks arising from the economic downturn. The Enterprise Finance Guarantee helps to overcome this by providing lenders with a government guarantee, mitigating their risk exposure to just 25 per cent of the loan value (Our experience shows that a more 5 P a g e

6 realistic figure is 50%). The Guarantee is part of the government's Solutions for Business Portfolio and is available to businesses throughout the UK through approved lenders. Participating lenders administer the eligibility criteria and make all commercial decisions regarding borrowing. The decision whether or not to use the Enterprise Finance Guarantee with any loan rests with the lender and follows their commercial assessment of the proposition. Find out more about the Enterprise Finance Guarantee on the Department for Business Enterprise and Regulatory Reform (BERR) website - Opens in a new window. The main features and criteria of the scheme are: a guarantee to the lender covering up to 75 per cent of the loan amount, for which the borrower pays a 2 per cent premium on the outstanding balance of the loan, payable to BERR (the first year premium will be 1.5 per cent) The ability to guarantee loans from 1,000 to 1 million and with terms of up to ten years Availability to qualifying UK businesses with an annual turnover of up to 25 million Availability to businesses in most sectors and for most business purposes, although there are some restrictions. Small Loans for Business The Small Loans for Business scheme is designed to help Northwest business owners, entrepreneurs, charities and social enterprises start up and expand their businesses. It provides small loans of between 3,000 and 50,000 to new and growing businesses, charities and social enterprises. It was set up to encourage and make it easier for more people to start up and grow their own enterprises in the region. The key benefits are: Finance for your business, usually unsecured Loan repayments to suit your needs including payment holidays Validation of your business plan Ongoing support to help you establish a track record 6 P a g e

7 The scheme is funded by government, the NWDA and private sector partners, so is a credible and stable way to fund your organisation's growth. Am I Eligible? The Small Loans for Businesses scheme is open to anyone in the Northwest - covering Cheshire, Merseyside, Greater Manchester, Lancashire and Cumbria. It aimed at people already running or looking to start one of the following ventures: New or small business Trading arms of charities Social enterprise Not-for-profit organisation The main criteria is you can show that you have tried to obtain funding from traditional sources - bank, building society for exampe- and been rejected. It maybe due to a poor credit score, lack of security, insufficient track record or plans that traditional lenders consider too risky. As long as you've got a workable business plan, with the potential to create new jobs - even if it's just one or two - you can apply. You can apply for any size of loan between 3,000 and 50,000. The scheme is open to everyone, and we particularly welcome applications from women, minority groups and businesses in deprived areas. How to Apply To apply you'll need to contact us, for assistance in completing the application along with your business plan and other required information. Your application will be judged solely on its business merits, the chances of success, growth potential and any jobs likely to be created. 7 P a g e

8 Cash Flow Finance Our Invoice Finance Broking service (sometimes referred to as Trade Finance, Invoice Discounting, Invoice Factoring or Confidential Invoice Discounting (CID)) Means that we can help your business improve its cash flow and the time that it takes for your invoices to be paid. By providing an immediate injection of cash against the value of your outstanding invoices. We have an impressive panel of Invoice Factoring or Discounting financiers across Lancashire, the North West and UK wide at our fingertips each with their own specific specialities. For instance we could assist you with: Improving your business cash flow Customers who pay late Trading with foreign companies with more confidence Accessing funding to fulfil a specific order Out-sourcing credit management Asset Based Lending Usually taken up as an option when a business has been refused an unsecured loan or overdraft. A lender may provide an advance or access to revolving credit secured against one of more assets of the business. The loan is usually based on a proportion of the value of the asset, with the lender taking into consideration the assets second hand market value in the case of default. Loans are typically made against plant and machinery, raw materials, finished goods and property. 8 P a g e

9 Unsecured Business Finance Business cash advances are based on merchants' future credit card transactions. Unlike traditional loan programs, a cash advance is totally unsecured (does not require collateral or a personal guarantee). The program is available to business with good or bad credit. Because the merchant cash advance is based on future credit card receivables, a good credit score is not required to be approved. Unlike loans, applying for a business cash advance takes literally minutes and approval is typically done within 48hours. What can business cash advances be used for? Merchants are free to use funding from their cash advances for anything they desire. Unlike other financing options available to businesses through banks and private lenders, we do not require a plan for the funding advance and we don't require that it be used for any specific purposes. A cash advance can be used for expansion, renovations, payroll, equipment, general business cash flow, or anything that you decide. 9 P a g e

10 Managing cash, using your cash flow forecasts It is essential that all businesses manage their cash flow efficiently. To do this management need to ensure that they have the right MI and systems and controls in place. However, in the current economic climate these controls need to be strengthened and cash monitored more closely. New Clients/Customers Each new customer s ability to pay and to pay on time should be considered when issuing terms of credit and invoices remember a Sale is not a Sale until it is paid for. Existing Clients/Customers Regularly review credit limits and the time allowed to pay your invoices. Consider reducing limits and time to pay for problem accounts or even insist on Cash on Delivery (COD). Issuing Invoices Make sure your invoices are issued promptly reiterate your terms of credit on each invoice. If you offer a discount for prompt payment state this on your invoice. Consider increasing the number of alternative payment methods available (i.e. PayPal, BACS etc) Once the invoice is issued Contact your customer to make sure the invoice has arrived and confirm that payment will be made on time. Contact them again closer to the due date to re-confirm payment Watch out for the early signs of a potential bad debt. 10 P a g e

11 Simple Cash Flow Forecasting Small businesses can use a simple cash flow forecast on a spreadsheet will should only take a couple of hours to set up (as part of our business planning service we include a simple spreadsheet) Outsourcing There are few small businesses that are entirely self-sufficient. Many businesses outsource their accountancy to an accountant, and their legal work to solicitors. Countless small businesses are finding that by outsourcing they can achieve higher business performance. Outsourcing is the management of a business procedure that is best left to an external provider, the cost and resource for running the procedure is then transferred to the external provider. In many cases, outsourcing can help create cost savings and acquire specialist expertise and experience to create a competitive advantage. A few areas that can be outsourced include: Accounts and tax preparation Human Resources Payroll Business Development Customer Contact Management Logistics Call Centre Operations Manufacturing Switchboard (Virtual PA) Website design and management Prepared by : Positive Business Development. June 2009 V P a g e