Information to Set up a Practice as a Recognised Body

Transcription

1 Information to Set up a Practice as a Recognised Body (NB: ensure information you use is current at your time of setting up) 1. Information available to assist in setting up in practice 2. Guidance notes on the CLC procedure for processing applications for a Recognised Body 3. Guidelines for applicants attending a meeting at CLC to apply for a Certificate of Recognition 4. Guidance notes for applicants applying for a managers licence to join in an existing Recognised Body 5. Guidelines for Approval of Licence Applications 6. CLC Meeting interview queries 7. Financial information 8. Preparing a business plan 9. Financial Forecasting 10. Partnership Agreements 11. Limited Company 12. Tax Information and advice 13 Lenders panel information 14. Queries

2 1. Information available to assist in setting up in practice (suggestions only for your reference) Business Guides from most of the High Street banks covers starting a business, finance, employment, banking, legal advice, sales & marketing, etc. Federation of Small Businesses Tel: Helpline for the Newly Self-Employed Tel: DBIS Employment Regulations Companies House National Land Information Service Council of Mortgage Lenders Department for Communities & Local Government These are just a few of the sources of information available for setting up a new business. Important aspects to be addressed when setting up in business / entering a partnership Business & Liability Insurance Cash Flow Forecast advice Chaps Terminal to bank Conveyancing software package Accounts software package Software licence in the L/Conveyancers name not the bookkeeper Terms of engagement to include CD scanning of files Interest payable on client account Public Liability insurance Premises insurance Contents insurance Setting up at home NI /Tax Self Employment VAT Employment Law National Minimum Wage Planning Permission Building Regulation approval Penalties self employed Existing contract of employment practising within a specified radius Proviser Property Prices

3 2. Guidance notes on the CLC procedure for processing applications for a Certificate of Recognition 1. The applicant must hold a current Licence. 2. Complete an application to remove the employment condition on a licence and remit the required administration fee (currently 150) to be sent to the CLC with your application for a managers licence and the application for a Certificate of Recognition. Two Certificates of Fitness are required with letters of reference, your current CV plus 2 certified copies of your ID, one to be photocard ID. 3. Provide a Business Plan; Cash Flow Forecast;; Draft Anti-Money Laundering Policy; Draft Complaints Procedure; Terms of Engagement and as much information as possible regarding the premises to be used, including photographs. If your practice is an LLP or a limited company, please provide a copy of the Certificate of Incorporation. This is to be sent with your application. 4. Attend a meeting at CLC. The meeting will be to assess the risk that your application may present and discuss details of your proposals for the future. If you consider it helpful to discuss your application at any time with a member of the CLC staff, then you are welcome to do so, either by telephone or by prior appointment. 5. If your application for a licence is approved, a licence will be issued, subject to such conditions and requirements as CLC may determine once the following criteria are met: Additional payment of the licence fee which will be calculated on a pro-rata basis to the CLC s year end, 31 st October (as appropriate). Payment of the Practice Fee and contribution to CLC s Compensation Fund will be required from you, calculated to the CLC s year end, 31 st October. A Certificate of Recognition for the practice will be issued. Satisfactory evidence of Professional Indemnity Insurance. Prime Professions are brokers to the Master Policy. Please ensure that you give Prime Professions the authority to advise CLC the fee income turnover as estimated on your proposal form A copy of the proposed practice notepaper to be sent to CLC for approval before printing. Any other matters which the CLC may consider appropriate. It will be necessary for attendance at the CLC Monitoring & Support Workshop, held at Chelmsford.

4 3. Guidelines for applicants attending a meeting at CLC to apply for a Certificate of Recognition CLC is required to ensure all Licensed Conveyancers are competent to practise, ensuring the public is protected from negligence, fraud and incompetence. CLC will invite an applicant to expand on the business plan and cash flow forecast previously submitted; provide a synopsis of the reasons for requiring a Certificate and outline previous experience. Specific questions will be asked regarding the following: PREMISES Details of proposed premises: location, access, entrance, security, restrictive covenants, planning permission (if applicable), storage, interview facilities to ensure client confidentiality are required. ACCOUNTS Emphasis is ALWAYS placed on the accounting procedure used in a practice. The employment of a legal cashier / book keeper would normally be expected. A manual accounts system is acceptable but a computerised system is recommended. The CLC s Monitoring Team can assist if you wish to discuss. Successful applicants are usually required to attend a one day Monitoring & Support Workshop at the CLC Offices prior to issue of a licence or within 3 months of the decision for approval. LOCUM Applicants will be required to advise the CLC of a designated locum in the event of absence, illness, holidays and death. HEADED NOTEPAPER Please provide the CLC with a copy of headed notepaper for approval BEFORE printing. The name of the practice is particularly important where a Licensed Conveyancer takes over a Solicitor s practice, to comply with both the SRA and the CLC Regulatory Arrangements. ANTI-MONEY LAUNDERING It is essential that applicants make themselves aware of the CLC Guidance for the Prevention of Money Laundering and Countering the Financing of Terrorism. The CLC Code and Guidance will assist in complying with the statutory and regulatory requirements through practical interpretation and provide a base from which a Licensed Conveyancer can develop and tailor their own policies, procedures and controls within their own practice. Copies of the Code & Guidance are available at uk.org/clcsite/media/pdfs/anti-money-laundering-and-combating-terrorist-financing-code-cif pdf; Financing-Guidance _2.pdf COMPLAINTS You must have your own complaints policy. See CLC Complaints Code & Guidance at Guidance.pdf CHANGE OF STATUS Where an applicant intends to take over an existing SRA practice, the CLC will require existing (client and office) bank accounts to be closed. All clients must be notified of the change in status, and the client s authority obtained for the CLC regulated Practice to act. New Terms of Engagement must be issued and placed on the file together with the client s acceptance letter. All files and accounts dealt with by the Solicitor s Practice should be available and will be subject to regulation by the SRA. All transactions from the commencement of the new practice will be regulated by the CLC. REFERENCES Where an applicant has not held a licence, (e.g. Solicitor) an SRA check, credit check and bankruptcy search will be made. Subject to a satisfactory interview, the CLC may ask for authority to approach previous employers for a reference. GENERAL Where a licence is approved and permission given to set up a new practice, the applicant will be required to pay any pro-rata licence fee due, pay the Practice Fee, contribute to the compensation fund and arrange and provide evidence of professional indemnity insurance. If the business does not start trading within six months from interview, a revised business plan, cash flow forecast and another meeting may be required by the CLC.

5 4. Joining in with an existing CLC Regulated Practice Guidance notes on the CLC procedure for processing applications from a prospective partner/member/director for a managers licence to enter into partnership/join in an LLP/Limited Company with an established CLC Recognised Body that is already trading as a Sole Practitioner/Partnership/Member/Director 1. The applicant must hold a current licence 2. Complete an application to upgrade an employed licence to a managers licence and remit the required administration fee (currently 150). An application for the Recognised Body is also required to show the change in the structure of the practice. It is likely that you will be required to attend CLC and will be advised on the basis of your application and the circumstances. 3. Provide a curriculum vitae and 2 forms of certified identity, one of which should be photocard ID. 4. You may be required to attend a meeting at the CLC with your potential partner/s. The meeting will take the form of questions by the CLC members discussing details of your application and your proposals for the future. If you consider it helpful to discuss your application at any time with a member of the CLC staff, then you are welcome to do so, either by telephone or by prior appointment 5. If your application is approved, a licence will be issued, subject to such conditions and requirements as the CLC may impose at its absolute discretion once the following criteria are met: Payment of the licence fee, if not already held, will be calculated on a pro-rata basis to the CLC s year end, 31 st October. Satisfactory evidence of Professional Indemnity Insurance arrangements, i.e. to advise the insurers of the change in status on the existing policy. A copy of the amended practice notepaper to be sent to CLC for approval before printing. A copy of the partnership agreement or a letter from all partners agreeing to be jointly and severally liable for the practice with confirmation of the date for appointment as a partner. Or for an LLP/Limited Company a fresh declaration of compliance with CLC s Regulatory Arrangements. Any other matters which the CLC may consider appropriate. It may be necessary for attendance at one of the CLC s Monitoring & Support Workshops, venue to be advised at the time.

6 5. GUIDELINES FOR APPROVAL OF APPLICATIONS FOR LICENCES TO PRACTISE AS LICENSED CONVEYANCERS Introduction 1 The purpose of these Guidelines is to provide guidance to applicants as to factors which the CLC will take into account when it is asked to determine whether a licence should be issued. Summary of CLC regulatory powers 2. As set out at section 28 Legal Services Act 2007 the CLC must, so far as is reasonably practicable, act in a way (a) (b) which is compatible with the regulatory objectives (set out at section 1 of the Legal Services Act 2007), and which it considers most appropriate for the purpose of meeting those objectives. Further, the CLC must have regard to- (a) the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed, and (b) any other principle appearing to it to represent the best regulatory practice. 3. When considering whether to issue a licence the CLC must satisfy itself that the applicant is a fit and proper person to practise as a licensed conveyancer (s.15(1) AJA); 4. The CLC will issue a licence, if it is also satisfied that the person to whom it is issued has complied, or will comply, with the requirements made with respect to professional indemnity and compensation; otherwise, a limited licence may be issued (s.15(7) AJA). 5. It may issue a licence subject to conditions (s.16(1) AJA) and may refuse the application for the issue of a licence if it is not satisfied the applicant is a fit and proper person to practise as a licensed conveyancer. 6. The regulatory powers must be exercised proportionately and take account of the specific circumstances of each case. Entitlement to Appeal 7. Any applicant dissatisfied with the determination of the CLC may ask the Adjudication Panel to review the determination and/or appeal to the Discipline and Appeals Committee (DAC) (s.29 AJA) within one month of being notified of the determination. Factors to be taken into account in determining an application 8. The CLC will determine whether an applicant is a fit and proper person to be issued with a licence by carrying out an assessment of the risk posed or likely to be posed by the individual which includes: the danger to which clients may be exposed; the public s confidence in the profession; and the legal process. The objective is for the CLC to be satisfied that those issued with licences have a level of integrity, honesty, trustworthiness and professionalism expected by the public and members of the profession. 9. In addition, the CLC must satisfy itself that the applicant is: willing to comply with regulatory requirements; and able responsibly to manage financial affairs both personally and on behalf of their clients; and that the issue of a licence will not expose members of the public, the profession or the applicant to harm. 10. When assessing an application against these criteria the CLC will apply the following tests. (a) Is there full confidence that the applicant has integrity and is trustworthy and honest?

7 (i) Unless there are exceptional circumstances the CLC will not be satisfied that the applicant is a fit and proper person and will refuse the application if the applicant has: convictions for offences involving dishonesty; or deceived or sought to deceive others, e.g. academic authorities, employers or members of the public. (ii) The following might satisfy the CLC of the applicant s present integrity, honesty and trustworthiness: if in view of the time since the behaviour occurred the applicant has demonstrated a subsequent pattern of exemplary behaviour; or the incident was of a minor nature, as indicated by the sentence or sanction applied. (iii) The type of evidence considered should normally include each of the following: at least one independent account of the event(s), including sentencing remarks where a criminal conviction is being considered; references from at least two independent people who know the applicant well and are familiar with the matters being considered. Ideally one of the references should be provided by a licensed conveyancer of good standing; evidence of rehabilitation independently corroborated e.g. independent reports, references from employers, or from a professional or regulatory body; and the applicant s account of the events and attitude towards them. (iv) Where a conviction or disciplinary hearing is being considered the CLC will not question or look behind the finding, although material such as sentencing remarks and any explanatory statement will be considered. (v) Where the matter being considered concerns academic misconduct (eg plagiarism) the CLC will take into account the range of academic misconduct that occurs. (vi) For the purposes of the assessment whether an applicant is a fit and proper person to become a licensed conveyancer there will be particular concern where in the commission of academic misconduct the applicant has committed deliberate and dishonest acts in order to achieve personal gain or advantage. (vii) The following factors would therefore be of particular interest to the CLC: the extent to which the individual was aware of the rules and procedures governing the referencing of material, or the use of group work or collaborative material; the extent to which the individual could reasonably have been expected to realise that the offence did not constitute legitimate academic practice; the extent to which the individual acted with intent to deceive; and the degree of benefit or advantage gained as a result of the offence. (viii) As in the approach to consideration of criminal convictions, the assessment will not seek to re-open the investigation undertaken by the training organisation, nor will it cast doubt on the validity and appropriateness of the decision taken, providing appropriate investigation and disciplinary procedures were followed, but statements intended to explain or mitigate the conduct in issue will be considered. (b) Is there full confidence that the applicant is willing now to comply with legal and regulatory requirements? (i) Unless there are exceptional circumstances there will not be full confidence and the application will be refused if the applicant: has been convicted of a criminal offence; has failed to disclose information to a regulatory body when required to do so or has provided false or misleading information; has breached the requirements of a regulatory body; or has failed to comply with the reasonable requests of a regulatory body. (ii) It may be possible for full confidence to be established in the applicant s willingness to comply with legal and regulatory requirements if: in view of the time since the incident the applicant is able to demonstrate that there has been a subsequent pattern of exemplary behaviour; a matter that was not disclosed was trivial or in view of the time when it occurred is no longer material or the breach was minor, as indicated by any sanction imposed; or the incident can be shown to have been the result of a genuine mistake or oversight. (iii) The evidence considered should normally include each of the following:

8 certificates of standing or statements from the relevant regulatory body or disciplinary tribunal and any limitations on the applicant s rights to practise or freedom to act; the applicant s explanation for failure to comply; and evidence of rehabilitation independently corroborated e.g. independent reports, references from employers, or from a professional or regulatory body. (c) Is there full confidence that the applicant is able responsibly to manage financial affairs? (i) Unless there are exceptional circumstances there will not be full confidence that the applicant can responsibly manage financial affairs and the application will be refused if: the applicant has been made bankrupt, has entered into an individual voluntary arrangement or has unmanageable debts arising from the applicant s recklessness, incompetence or dishonesty; the applicant has deliberately sought to avoid responsibility for debts; or there is evidence of dishonesty in relation to the management of finances. (ii) The following might help to establish confidence in the applicant s ability to manage financial affairs: if in view of the time since the bankruptcy or occurrence of the debts there is evidence of subsequent sound financial management and conduct and that creditors have been paid; the applicant is able to establish that he was affected by exceptional circumstances beyond his control or which he could not have reasonably foreseen. (iii) The type of evidence considered should normally include each of the following: credit check information; the applicant s explanation of the circumstances, corroborated where possible; actions taken to clear any debts. (d) Is there a risk that the applicant s admission would diminish public confidence in the licensed conveyancer s profession? (e) (i) Unless there are exceptional circumstances there is a risk that public confidence in the profession will be diminished if a licence is issued to an applicant who: has served a prison sentence, has remained on licence or is listed on the Sexual Offenders Register; has misused his position to obtain pecuniary advantage, particularly if associated with the provision of legal services; has been responsible for dishonest or violent behaviour; has been convicted of offences associated with obstructing the course of justice; who has been convicted of a racially motivated offence; or has knowingly worked when his competence was impaired by alcohol or drugs in which case, unless the risk can be addressed to the satisfaction of the CLC, the application will be refused. (ii) The risk might be addressed satisfactorily if: in view of the time since the misbehaviour occurred the applicant is able to demonstrate that there has been a subsequent pattern of exemplary behaviour; or the misbehaviour was not of a serious nature, as indicated by the sentence or sanction applied. (iii) The evidence provided should normally include each of the following: independent accounts of the convictions and behaviours that have given rise to the concerns, e.g. sentencing remarks; evidence of rehabilitation independently corroborated e.g. independent reports, references from employers, or from a professional or regulatory body. Is there a risk that the issue of a licence to the applicant could result in harm to members of the public, the profession or the applicant? (i) The CLC will consider there is a risk of harm to members of the public, the profession or the applicant if there is evidence that: the applicant is or has been dependent on drugs or alcohol; the applicant s mental health or his exposure to stressful situations can seriously impair his judgement, his ability to manage his work or his professional relationships; the applicant has been violent with colleagues or clients; or the applicant has experienced recurrent episodes of behaviour/dependency/illness which have given cause for concern in which case, unless the risk can be addressed to the satisfaction of the Committee, the application will be refused.

9 (ii) The evidence considered should normally include: recent and full medical reports, including psychiatric reports where relevant; accounts from employers and other parties; and a statement from the applicant.

10 6. CLC Interview Queries The following matters may be raised with applicant during interview GENERAL PRACTICE Brief description of proposed practice Number of fee earners Qualifications/experience Support staff Arrangements for the supervision of staff ACCOUNTS How the accounts will be dealt with Who will deal with postings and/or end of month procedures Will a bookkeeper be appointed Is the software used for the accounting function a dedicated legal accounting package PREMISES Layout / entrance Any risk of breach of client confidentiality Reception area Any shared features / equipment / staff Security of offices Storage of Deeds CONVEYANCING How many completions are handled / anticipated each month Are file reviews carried out/to be carried out Does the applicant carry out identity checks Is the applicant aware of the CML handbook requirements Does applicant keep a record on the file of the advice given to clients If so, is this by way of a written report If not is a full attendance note made of any interview How does the applicant ensure that Land Registry applications are delivered on time Is the applicant aware of the CLC monitoring programme ADDITONAL WORK NOT REGULATED BY CLC Is it intended to carry out other legal work such as will writing. What steps are planned to keep that work separate? (bank accounts/letterheads) BUSINESS PLAN / CASH FLOW FORECAST Is it realistic Are VAT/Inland Revenue/Compensation Fund /Professional Indemnity Insurance/Licence Fees included PROFESSIONAL INDEMNITY INSURANCE Has the applicant contacted CLC Insurance Brokers regarding PI Premium Have there been any claims made within the applicant s employment MONITORING & SUPPORT WORKSHOP Attendance will be required BEFORE a licence is issued includes accounts & conveyancing Held at CLC Offices; full day course; free of charge; lunch provided Bookkeeper / cashier also invited CONTINUING PROFESSIONAL DEVELOPMENT Is the applicant on target to meet CPD requirements 12 hours + a further 4 hours if holding a probate licence; 6 hours for employed licence + further 2 hours if holding a probate licence; based on CLC Licence Year What type of CPD does the applicant usually undertake Has the applicant completed any CLC correspondence courses

11 CONDITION ON LICENCE May be relevant ADDITIONAL POINTS FOR APPLICANTS PROPOSING TO ENTER INTO PARTNERSHIP Has the applicant taken independent legal advice Has the applicant taken independent accountant s advice Has the applicant inspected the books of account Is the applicant aware of the joint and several liability for client account If there is more than one office, how will the books of account be dealt with ADDITIONAL POINTS FOR CONVERTING SOLICITORS Why does the applicant wish to make the change from Solicitor to Licensed Conveyancer Are there any current negligence claims outstanding Are there any circumstances which mean that claims may be forthcoming Details of claims history Have there been any complaints What has been the result - are any still pending Any SRA disciplinary proceedings either past/pending/proposed (Findings & Order) Has any lender ever removed or threatened to remove the applicant from their panel Has applicant appraised themselves of the CLC s Regulatory Arrangements Part of the interview process will be assessment of this awareness; in particular the following Codes: Code of Conduct Recognised Body Code AML & CTF Code Management & Supervision Arrangements Code and Guidance Notification Code Is applicant aware of differences between the CLC and SRA Regulation Does applicant use terms of business and give a fee estimate Is applicant aware that CLC employs Legal Practice Inspectors to carry out file inspections How does applicant believe he/she would fare should an inspection be carried out tomorrow Has the applicant spoken with other Licensed Conveyancers about the profession, in particular any other former Solicitor who has converted

12 7. Financial Information (for year end 31 st October Licensed Conveyancers) Licensed Conveyancer Annual Licence Fee 400 RECOGNISED BODY PRACTISING AS A SOLE PRACTITIONER/PARTNERSHIP/LIMITED COMPANY Compensation Fund Contribution Minimum % of turnover Practice Fee Minimum 1070 Base rate 1.5% CLC BANKERS Barclays Bank High Street Chelmsford CM1 1BG CLC ADMIN A/C Number CLC COMP FUND A/C Number PROFESSIONAL INDEMNITY INSURANCE CLC regulated Practices are required to have PII under the CLC s Master Policy, or with another Authorised Insurer provided the CLC is satisfied that in all its conditions and extent it is at least equivalent to the cover provided under the CLC s Master Policy. PROFESSIONAL INDEMNITY INSURANCE CLC MASTER POLICY INSURANCE BROKERS Willis Group The Willis Building 51 Lime Street London EC3M 7DQ The main contacts are: Karen Mansfield Divisional Director, Finex Global D: E: Karen.mansfield@willis.com Mike Mortlock Executive Director, Finex Global D: E: mike.mortlock@willis.com

13 8. Preparing a business plan It is essential to have a realistic, working business plan when you are starting a business. A business plan is a written document that describes a business, its objectives, its strategies, the market it is in and its financial forecasts. It has many functions, from securing external funding to measuring success within your business. THE AUDIENCE FOR YOUR BUSINESS PLAN You are required to produce a business plan prior to interview, but there are many benefits to creating and managing a realistic business plan. Use it in-house to: help spot potential pitfalls before they happen; structure the financial side of your business effectively; focus your development efforts; work as a measure of your success. In addition to the CLC, the following may request to see your business plan: banks; external investors; grant providers; potential partners, directors, shareholders, managers. You should also bear in mind that a business plan is a living document that will need updating and changing as your business grows. Regardless of whether you intend to use your plan internally, or as a document for external people, it should still take an objective and honest look at your business. Failing to do this could mean that you and others have unrealistic expectations of what can be achieved and by when. WHAT THE PLAN SHOULD INCLUDE The business plan should provide details of: how you are going to develop your business; when you are going to do it; who is going to play a part; how you will manage the accounts. Clarity on these issues is particularly important if you are looking for finance or investment. The process of building your plan will also focus your mind on how your new business will need to operate to give it the best chance of success. Your plan should include: An executive summary - this is an overview of the business you want to start. Many lenders and investors make judgments about your business based on this section of the plan alone. The executive summary is often the most important part of your business plan. Positioned at the front of the document, it is the first part to be read. However, as a summary it makes sense to write it last. It may be the only part that will be read. Faced with a large pile of funding requests, banks have been known to separate business plans into "worth considering" and "discard" piles based on this section alone. What is it? The executive summary is a synopsis of the key points of your entire plan. It should include highlights from each section of the rest of the document - from the key features of the business opportunity through to the elements of the financial forecasts. Its purpose is to explain the basics of your business in a way that both informs and interests the reader. If, after reading the executive summary, an investor understands what the business is about and is keen to know more, it has done its job. It should be concise - no longer than two pages at most and interesting. A short description of the business opportunity who you are; what you plan to offer; why and to whom.

14 If you want other people to invest in your business or if you are writing your plan to focus your existing business activities, you must be able to clearly convey what your business does. This part of the plan sets out your vision for your new business and includes who you are, what you do, what you have to offer and the market you want to address. Start with an overview of your business: when you intend to start trading and the progress you have made to date; the type of business and the sector it is in; any relevant history - for example, if you acquired the business, who owned it originally and what they achieved with it; the current legal structure; your vision for the future. Then describe your services as simply as possible, defining: what makes it different; what benefits it offers; why customers would come to you; how you plan to develop your services; the key features of your sector. Remember that the person reading the plan may not understand your business and its services as well as you do, so try to avoid jargon.. It is a good idea to get someone who isn't involved in the business - a friend or family member perhaps - to read this section of your plan and make sure they can understand it. Your market and competitors In this section you should define your market, your position in it and outline who your competitors are. In order to do this you should refer to any market research you have carried out. You need to demonstrate that you are fully aware of the marketplace you are planning to operate in and that you understand any important trends. You should also be able to show that your business will be able to attract customers in a growing market despite the competition. Key areas to cover include: your market - its size, historical data about its development and key current issues; your target customer base - who they are and how you know they will be interested in your services; your competitors - who they are, how they work and the share of the market they hold; the future - anticipated changes in the market and how you expect your business and your competitors to react to them. It is important to know your competitors' strengths and weaknesses as compared to your own - and it is good practice to do a competitor analysis of each one. Remember that the market is not static - your customers' needs and your competitors can change. So, as well as showing the competitor analyses you have undertaken, you should also demonstrate that you have considered and drawn up contingency plans to cover alternative scenarios. Marketing This section should describe the specific activities you intend to use to promote your services. It is often the weak link in business plans so it is worth spending time on it to make sure it is both realistic and achievable. A strong marketing section means you have a clear idea of how you will get your services to market. Your plan will need to provide answers to these questions: How do you plan to position your service in the market place? Who are your customers? Include details of customers who have shown an interest in your service and explain how you plan to go about attracting new customers. What is your pricing policy? How much will you charge? How will you promote your service? Identify your sales methods, e.g. direct marketing, advertising, PR, , e-sales. How will you reach your customers? What channels will you use? How will you do your selling? Do you have a sales plan? Have you considered which sales method will be the most effective and most appropriate for your market, such as selling by phone, over the

15 Internet, face-to-face? Are your proposed sales methods consistent with your marketing plan? And do you have the right skills to secure the sales you need? Your team's skills Your business plan needs to set out your own background and skills and the structure and key skills of both your management team and your staff. It should identify the strengths in your team and your plans to deal with any obvious weaknesses. The management team If you're looking for external funding, your management team can be a decisive factor. Explain who is involved, their role and how it fits into the organisation. Include a CV or paragraph on each individual, outlining their background, relevant experience and qualifications. Include any advisers you might have such as accountants or lawyers. If you're looking to satisfy your bank manager or other investors, you need to demonstrate that your management team has the right balance of skills, drive and experience to enable your business to succeed. Key skills include sales, marketing and financial management as well as production, operational and market experience. Your investors will also want to be convinced that you and your team are fully committed. Therefore it is a good idea to set out how much time and money each person will contribute to the business and the salaries and benefits you plan to draw. Your people Give details of your workforce in terms of total numbers and by department. Spell out what work you plan to do internally and if you plan to outsource any work. Other useful figures might be sales or profit per employee, average salaries, employee retention rates and productivity. Your plan should also outline any recruitment or training plans, including timescales and costs. It is vital to be realistic about the commitment and motivation of your people and spell out any plans to improve or maintain staff morale. Your operations Your business plan also needs to outline your operational capabilities and any planned improvements. There are certain areas you should focus on. Location Do you have any business premises? What are your long-term commitments to the property? Do you own or rent it? What are the advantages and disadvantages of your current location? Management-information systems Have you established procedures for case management and accounts? Can they cope with any proposed expansion? Information technology (IT) IT is a key factor in most businesses, so include your strengths and weaknesses in this area. Outline the reliability and the planned development of your systems. 9. Financial forecasting CLC need to be reassured that as well as being qualified to carry out conveyancing transactions successfully, you are also capable of making the business financially viable. As part of your plan you will need to provide a set of financial projections which translate what you have said about your business into numbers. You will need to look carefully at: how much capital you need if you are seeking external funding the security you can offer lenders how you plan to repay any borrowings sources of revenue and income You may also want to include your personal finances as part of the plan at this stage.

16 Financial planning Your forecasts should run for the next three (or even five) years and their level of sophistication should reflect the sophistication of your business. However, the first 12 month forecast should have the most detail associated with them. Include the assumptions behind your projection with your figures, both in terms of costs and revenues so investors can clearly see the thinking behind the numbers. What your forecasts should include Cash flow statements - your cash balance and monthly cash flow patterns for at least the first 12 to 18 months. The aim is to show that your business will have enough working capital to survive so make sure you have considered the key factors such as the timing of sales and salaries. Profit and loss forecast - a statement of the trading position of the business: the level of profit you expect to make, given your projected sales, the costs of providing services and your overheads. Sales forecast - the amount of money you expect to raise from sales. Your forecasts should cover a range of scenarios. New businesses often forecast over-optimistic sales. It is sensible to include subsidiary forecasts based on sales being significantly slower than you are actually predicting. Risk analysis Alongside your financial forecasts it is good practice to show that you have reviewed the risks your business could be faced with, and that you have looked at contingencies and insurance to cover these. Risks can include: competitor action; commercial issues - sales, prices; operations - IT, technology or production failure; staff - skills, availability and costs; acts of God - fire or flood.

17 10. Partnership agreements If you decide to form a partnership with another Licensed Conveyancer, it is prudent to have a formal partnership agreement setting out the rules governing how the partnership operates and covering the What happens if..situations. You should have the agreement drawn up professionally by an appropriately qualified lawyer after deciding what you want the agreement to cover. In particular, you should consider: Running the business Partner s duties Working hours and holidays Decision-making procedures Business premises Cars Special circumstances Partner retirement procedures Death of a partner Disability of a partner Establishing the right to expel a partner Arbitration for unresolved disputes Financial matters Profit sharing arrangements, drawings on account Partnership capital and interest arrangements Banking and financial arrangements Accounting arrangements Making provision for tax payments

18 11. Limited Company Independent advice should be considered to ensure you make an informed decision. If you are thinking of looking into this, you will find Companies House website very useful and also searching for related information such as: Advantages of incorporation Disadvantages of incorporation 12. Tax information and advice can be sought from a suitably qualified tax expert/consultant if required:- Sole practice or A partnership or An LLP or A Limited Company VAT PAYE Reference to will assist 13. Lenders Panel Information The CLC is aware from comments made from members of the profession, that they encounter difficulties from time-to-time with Lenders showing a reluctance to include them on their Panels. You need to ensure that you will be able to apply for panel appointments and/or have alternative arrangements to cover any difficulties. 14. Queries If you have any queries or you require further information, please do not hesitate to contact: Council for Licensed Conveyancers CAN Mezzanine, East Road, London N1 6AH licensing@clc-uk.org Tel: