Choosing your business structure

Choosing your business structure

Sole Trader

What is a sole trader?

A sole trader is a self-employed individual who is solely responsible for their own business. It is most common to start as a sole trader as it requires minimal set up, cost and administration.

When and why should you register as a sole trader?

If your business is a low cost start up and you are not going to need to borrow money to grow your business then being a sole trader may be right for you at this moment. However, it is important to understand that you alone are responsible entirely for all costs of the business.

As a sole trader it can be quite a lonely and exasperating journey. However, the advantage of being in full control and being your own boss and doing what you are passionate about may be what makes up for the uncertainty and heavy responsibility that comes with it.

How to register

Although you are not required to register at companies’ house, you must notify HMRC that you are self-employed within 3 months of starting.

You will need to register for your self-assessment and then file a tax return yearly.

You’ll need to keep a record of all your business transactions preferably on bookkeeping software.

You’ll also need to pay Income Tax on your profits and Class 2 and Class 4 National Insurance

ClassRate for tax year 2017 to 2018
Class 2£2.85 a week
Class 49% on profits between £8,164 and £45,000
2% on profits over £45,000

As a sole trader your business is not thought of as a legal entity therefore you will be solely responsible for all debts and legal action taken out against you.

So whilst you may benefit from having less regulations and paperwork to deal with, the high risk that comes with being a sole trader may make you think about registering as a limited company instead.

Private Limited Company (LTD)

What is a private limited company?

A Private limited company is a business that is owned by its shareholders and run by directors. The ownership of the company is split into shares and is owned by the shareholders. The directors run the company and are required to perform certain duties for the company and its shareholders.

What does ‘limited liability’ mean?

This means that all debts that are incurred are the liabilities of the company and not of the shareholders or the directors. So if the company was to go bankrupt, the shareholders would only lose the investment they put into the company, but their own personal assets would not be affected.  The directors also do not incur any personal liability as the act as agents for the company.

Requirements for forming a Private Limited Company

  • To set up a private limited company you need to register with Companies House. This is known as ‘incorporation’.
  • At least one director over the age of 16 must be appointed.
  • The company must have a registered office in the UK.
  • The company name must comply with Government regulations
  • At least one share must be issued at the time of incorporation.
  • An address for the company
  • Details of the company’s shares (At least one shareholder is needed)
  • To check what your SIC code is (identifies what your company does)
  • Shareholders to agree to create the company and the written rules (known as ‘memorandum and articles of association’)
  • Details of people with significant control over your company

Register your company

Once you have these details, you can register your company.

It costs £12 to register online and £40 by post

Your company is usually registered within 24 hours online and 8 to 10 days by post.

After you’ve registered

Once the company is registered you’ll get a ‘certificate of incorporation’. This confirms the company legally exists and shows the company number and date of formation.

You’ll also need to register for Corporation Tax within 3 months of starting to do business.

Business legal structure comparison table

 

(www.startups.co.uk)

TypeStructureForAgainst
Sole traderExclusive owner of the business, entitled to keep all profits but liable for all losses

·         Low cost, easy to set-up

·         Full control retained

·         Very little financial reporting

·         Full liability for debt

·         Pay more in tax

·         Lacks credibility in market

PartnershipBetween two or more individuals who share management and profits

·         The above, but with more heads

·         More potential to raise finance

·         The above, affecting all partners

·         Can be messy to wind up

Limited companyPrivate company whose owners are legally responsible for its debts only to the extent of the amount of capital they invested

·         Less personal financial exposure

·         Favourable tax regime

·         Ability to work for corporate clients

·         Administrative and regulatory demands heavier

·         Annual accounts and financial reports must be placed in public domain

Limited liability partnership (LLP)Some or all partners have limited liabilities, and exhibits elements of partnerships and corporations

·         Flexibility: can be incorporated in members’ agreement

·         Advantages of limited company and partnership combined

·         Profit taxed as income

·         Partners must disclose income

·         LLP must start to trade within a year of registration – or be struck off

Extremidy is a business management company. Our aim is for small businesses to, connect, grow and succeed, by providing them with support, networking and assistance. Please like our Facebook and Twitter page to keep informed of all our news and helpful business advice.
Extremidy Team
www.extremidy.co.uk

Hiring your first employee

Hiring your first employee

Job Description

The first thing you need to do, once you have decided you need to hire staff, is too write the job description, this will enable you to clarify what exactly it is you require from an employee and will also help you to write the job advert. The job description needs to include; job title, job description, the mains tasks and responsibilities along with wages, location, hours and basis. You will also need to include, knowledge, skills and qualifications desired or essential.
Advertise for the role
You can advertise your jobs;
Online- This is the more popular choice and less expensive than the more traditional choices. Popular places to advertise online, are:

  • • Reed
  • • Indeed
  • • Universal Jobmatch
  • • Gumtree
  • • Extremidy Advertising
  • Newspaper
  • Recruitment Agencies
  • Your own website
  • A notice in your window

Shortlist and interview candidates
Once you have shortlisted your candidates, based on their appropriate job description and their cv you will need to invite them in for an interview.
Before the interview, you’ll send each candidate a warm, friendly email message reminding them of the date and time for the interview, the job title they’re interviewing for and the names and titles of the people they will meet at the interview.
On the interview day, this will be your chance to get to know your candidates by asking them a few questions and allowing them to ask you questions. Here’s a few things you can discuss.

  • What is this company all about? What do we do?
  • What is (the interviewers) role?
  • What is the job role?
  • Why are you hiring?
  • What will the candidates job entail?
  • What are the working hours, pay schedule, and general operations of the job role?
  • What is the training and career path opportunities for this job?

You will need to ask your candidate a few questions to help you to get to know them a little better, here’s a compiled list of questions to get you started:

  • What prompted you to apply for this job? What interested you the most about this position?
  • What are the three most important attributes or skills that you believe you would bring to our company if we hired you?
  • How do you go about continuing to develop your professional skills and knowledge?
  • If I were to poll everyone you’ve worked with, what percent would not be a fan of yours? Then, if I were to interview these people, what words would they most frequently use to describe you?
  • What’s the biggest decision you’ve had to make in the past year? Why was it so big?”
  • Why should we hire you?
  • Why do you want this job?
  • How do you handle stress and pressure?
  • What are your goals for the future
  • Do you have any questions?

Decide on candidate
Once you have held all the interviews for the role, you will need to decide on a candidate. The candidate you choose to hire will solely be based on your decision, after you determine whether they have the necessary skills, qualifications and experience, which you would have gathered from the job description, and you have completed the interview, which should have given you a better idea of how your candidate thinks and why they want to work for you. You will then have to decide who is best for your company, which should be based on your company’s culture and what the job entails. You should also talk it out with the other interviewers if possible to see their thoughts, but ultimately its your decision. Just ensure that your final decision is not based on a discriminative basis. Learn more here about avoiding discrimination when hiring.

Complete checks and provide a written statement of employment
Decide how much to pay someone – you must pay your employee at least the National Minimum Wage which is currently £7.83 (April 2018).
Check if someone has the legal right to work in the UK.
Check if you need to apply for a DBS check if you work in a field that requires one, eg with vulnerable people or security.
Get employers’ liability insurance .
Send details of the job (including terms and conditions) in writing to your employee.
Tell HM Revenue and Customs (HMRC) by registering as an employer – you can do this up to 4 weeks before you pay your new staff.
Check if you need to automatically enroll your staff into a workplace pension scheme.

Extremidy is a business management company. Our aim is for small businesses to, connect, grow and succeed, by providing them with support, networking and assistance. Please like our Facebook and Twitter page to keep informed of all our news and helpful business advice.
Extremidy Team
www.extremidy.co.uk

Extremidy Flyer

Could your business benefit from having a virtual team behind you. If you spend more time on administrative tasks then on actual revenue generating tasks, then Extremidy can help you. We can offer you virtual support by providing a number of useful services.

 

 

Extremidy is a business management company. Our aim is for small businesses to, connect, grow and succeed, by providing them with support, networking and assistance.
Please like our Facebook and Twitter page to keep informed of all our news and helpful business advice.
Extremidy Team
www.extremidy.co.uk

 

Revamped website

We have finally finished revamping our website.

We took some time to redo our website and re-strategize our service offerings. So, we know offer a more substantial and useful service for you and your business.

We still offer you the ability to advertise your business, job vacancies and events, but we know also offer you the ability to sell your products and services, all of this has now been moved to our new site, extremidyadvertising.co.uk.

We have also added our business support service, where you can have the support of a virtual team behind you, who can offer you, virtual administration, virtual bookkeeping, virtual marketing, virtual event management and much more.

So, don’t wait any longer to have the support you need for your business, find out more today at www.extremidy.co.uk and let us share the extra workload.

 

 

Extremidy is a business management company. Our aim is for small businesses to, connect, grow and succeed, by providing them with support, networking and assistance.
Please like our Facebook and Twitter page to keep informed of all our news and helpful business advice.
Extremidy Team
www.extremidy.co.uk

 

How to Create an Effective Marketing Plan

How To Create An Effective Marketing Plan

A marketing plan is another vital document that all business owners should have and works hand in hand with your business plan. Where your business plan gives you a roadmap to direct your business a marketing plan allows your business to understand how it will get there by providing necessary steps to help you establish strong customer relationships. A marketing plan will also need thoughtful planning and research to produce a useful, beneficial document. Marketing plans are vital to marketing success. They help to focus the mind of companies and marketing departments on the process of marketing i.e. what is going to be achieved and how we intend to do it.

What you need to think about when creating your marketing plan:

Market identification

It is important to clearly identify the market for your products and services, as well as explain your Unique Selling Proposition (USP). Your plan should include:

Market analysis – what is your market? What is your position within that market? Is it a niche market?

Sector growth – is your market growing, declining or has it reached a plateau? Is it becoming more specialised?

Customer base – what are your customer demographics (e.g. age, sex, income, location) and psychographics (predisposition, influences, lifestyle)? What customers offer the best prospects for you? What evidence do you have that they need or desire your product or service?

SWOT analysis – identify your business strengths, weaknesses, opportunities and threats

Which segment? How will we target the segment? How should we position within the segment?

Why this segment and not a different one?

Define the segment in terms of demographics and lifestyle. Show how you intend to ‘position’ your product or service within that segment.

Marketing mix

Once you have identified your position in the market, you next need to formulate your marketing mix. This is the combination of:

Product – this refers to the products, services, add-ons, installation, upgrades, after-sales support, etc that you offer the customer. Is the product Sold individually, as part of a bundle, in bulk, etc?

Price – putting your product or service on the market at the right price is crucial. How tight are your margins? Will you cost plus, skim, match the competition or penetrate the market?

Place – do you sell your products from a fixed physical location or do you sell over the phone or internet? How far does your business stretch geographically? Will you market direct, use agents or distributors, etc?

Promotion – Which media will you use? e.g sponsorship, radio advertising, sales force, point-of-sale, etc? Think of the mix elements as the ingredients of a ‘cake mix’. You have eggs, milk, butter, and flour. However, if you alter the amount of each ingredient, you will influence the type of cake that you finish with.

Brand Positioning

Brand positioning describes how a brand is different from its competitors and where, or how, it sits in a market. What is your brand-positioning statement for your target customers? It should be a simple declarative sentence of how you will meet your customer needs and beat the competition.  The best positioning statements are those that are single-minded and focus on target customer needs. Ultimately, your brand and what it symbolizes for customers should be your strongest competitive advantage.

Competitor analysis

Your marketing plan should also include a thorough assessment of the competition:

Who are they?

Where are they based?

What are their product lines (services offered)?

What are their prices?

How many employees do they have?

What are their strengths and weaknesses?

What is their market share?

What ads or promotions are they running?

Objectives

You should have SMART objectives/goals.

Specific – Be precise about what you are going to achieve (set real numbers with deadlines)

Measurable – Quantify your objectives (Ensure you can track your goals)

Achievable – Are you attempting too much? (It can be challenging but make sure it is possible)

Realistic – Do you have the resources to make it happen (Be honest with yourself, are you capable)

Timed – State when you will achieve the objective (Set a deadline)

If you don’t make your objective SMART, it will be too vague and will not be realized. Remember that the rest of the plan hinges on the objective. If it is not correct, the plan may fail.

Promotional activity

Clearly state whether you will use direct marketing, public relations, advertising or sales promotions to carry out your marketing campaign. Be warned – advertising and public relations campaigns can be expensive, so it is important that you spend wisely and evaluate the effectiveness of your campaigns.

 Budgets

Your marketing plan should state the annual marketing budget, as well as an itemised list of expected expenditures. A projection of expected returns on marketing expenditure should also be included.

Once strategies have been identified for each channel, you need to figure out your strategy. How much are you willing to spend in each channel? What outcomes do you expect to see? What tasks do you need to accomplish for each step in your process? Creating a well-defined list of budgets, goals and action items, with appropriate personnel assigned to each, can help make your marketing plan a reality.

Flexibility

Your marketing plan should not be set in stone; certain factors may make it necessary for you to adapt or modify your plan, for example, changes in:

Trading environment

Government policies

Lifestyle trends

Technology

Competition

Employees

Suppliers

Multiple Channels

While these steps are a good starting point, companies also need to incorporate multiple channels into their marketing plans. Some of the most popular channels for today’s businesses include:

Social media marketing

Social media has become an essential part of businesses’ marketing plans. Businesses that have yet to realize the opportunities that Facebook, Twitter, Google+, LinkedIn and other networks provide them are missing out. First you need to work on the content you will be delivering, find where your customers are and then consistently post relevant useful, branded information to your customers.

Email marketing

Though email marketing may not be as new of a concept as social media marketing, it is an effective and popular choice for many small business owners. Companies can implement email-marketing techniques in a number of ways, including newsletters, promotional campaigns and transactional emails. Companies such as MailChimp and Constant Contact make it easy for companies to manage their email campaigns.

Mobile marketing

The popularity of smartphones and tablets has helped to change the way companies target their customers. As a result, companies are looking to implement strategies that reach customers on their devices.

Mobile marketing should not be considered a mere extension of email or online marketing, however. Since many consumers have a mobile device with them at all times, texts and push notifications will almost certainly be seen by the recipient.

Next steps

In order for your marketing plan to be effective you need to, discover what you would like your marketing efforts to achieve. Are you hoping to see increased sales or traffic, or new client contacts? Set six-month milestones for each channel, and compare the results against prior efforts and your expectations. How will you measure your success? What do you do when a marketing platform is under-performing? If your efforts have fallen flat short, go back to the basics. Asking your customers to complete an email survey about their social media habits in exchange for a coupon or discount may give you useful insight into relationships between customer demographics and your marketing efforts.

Finally, write a brief summary at the beginning of the plan. This will help others to get acquainted with the plan without having to spend time reading it all. Place all supporting information into an appendix at the back of the plan.

Extremidy is a business management company. Our aim is for small businesses to, connect, grow and succeed, by providing them with support, networking and assistance. Please like our Facebook and Twitter page to keep informed of all our news and helpful business advice.
Extremidy Team
www.extremidy.co.uk