Steven Mugglestone

The more I learn, the less I know

Posts Tagged ‘cash flow

Business Turnaround, a Dark Art or Common Sense and a Proper Business Plan

leave a comment »

More than half of Britain’s small businesses collapse because of cash-flow problems. The UK Insolvency Service sites 65 common reasons why businesses fail.  Many advisers and “experts” publish lists of a number of reasons, seven being a common number, unlucky for the failed business, with clearly a prize and first place going to the Insolvency Service at 65, clearly retired exhausted after then.

We like to keep things simple as this helps us and our clients, but we believe that the success of a business (and therefore the failure of a business) is down to one area (ok, poetic license as it is a related area), cash flow problems due to the lack of a real plan and system of control (i.e. the area that an experienced business orientated FD is good at).

Looking at seven common reasons why businesses fail, it points to the same cause and solution:

  • Business started for the wrong reasons and to try and make money quickly (lack of a real plan and system of control)
  • Poor management and lack of management (lack of a real plan and system of control)
  • Lack of capital (lack of a real plan and system of control)
  • Poor location and marketing (lack of a real plan and system of control)
  • Lack of planning (lack of a real plan and system of control)
  • Over-expansion (lack of a real plan and system of control)
  • No website (lack of a real plan and system of control)

No apologies for labelling the point but all FDs would say the same thing, lack of cash caused by a lack of a real plan and system of control and improvement.  Other recent articles that we have read with interest now refer to zombie businesses and that pretty much sums it up, a re-animated corpse, with no mind of its own; no control of its own; in fact control lies with others; never learning and never changing. In fact a favourite observation of ours is the common lesson for most areas of human behaviour; “If you do the same thing that you have always done, you will always get the same result.”  This is as important to businesses as anything else.  In fact in business, if you do the same thing that you have always done, it is likely that the future results will be worse than before.  We do recognise that many also say; “If it’s not broke then don’t fix it,” but this is also ignoring both normal wear and tear and inevitable depreciation.

Speaking to and working with people who have experienced or been a part of a business failure (and those of us that have seen, have worked with and have been a part of successful turnarounds), there are a range of views and emotions, noting the lack of support from interested parties such as banks, other lenders and major creditors, but in the vast majority of these, there is a common issue, lack of a real plan, lack of innovation and change, lack of a system of control which leads to a cash flow crisis.  In fact the references to lack of support from the bank, when explored further, usually uncover a situation where the business has pretty much lost control to the bank or lender.  There are also a significant and scary number of businesses which only produce annual statutory accounts, find out that they have made a loss, months after the year end; face another issue, such as loss of a major customer or restricted key supply and then tell the bank all the bad news at the same time, asking for funding/overdraft extension, with no solutions being offered by them.  They lack any plan in respect of the relationship, communication and information being given to their bank and are confused and angry when the bank then either refuse the extension or worse still, reduce or remove the overdraft facility completely.  We are not going to comment on the issues surrounding banking over the last two years or so, as this is well documented, but we are aiming to concentrate on how businesses can and should take matters in their own hands and control.

As we are still in what can only be described as challenging and uncertain times for businesses, there are now many who describe themselves as turnaround specialists and look to help to ensure that your business starts on a road to recovery.

I will now make a sweeping generalisation and observation, but in my opinion, there appears to be broadly three types of turnaround specialists;

  • Investors and their advisers who are looking to save the business but also to take advantage of the vulnerable position of the business, to take part or majority ownership of the business for considerably less than normal market value, this is harsh but to be expected;
  • Insolvency experts acting as expert advisers (but usually only looking to support the lending bank).  The reports that they produce and advice that they give can be very biased for not only the lenders positions, but for them to win the future work from the lender, quite a lot of business people recognise this with the analogy of putting Count Dracula in charge of the blood bank and emergency blood supply;
  • There are, however, other experienced advisers who have been there, done that and have the necessary skills and desire to help the business turnaround and be successful.

Going back to the title of the blog, despite the mystery and myth of business turnaround specialists, it is not a dark art.  Businesses are successful because they have a good product; a real plan; a system of control and improvement and control of their cash, businesses fail because they may have a good product but they do not have a real robust plan; have no real system of control and improvement and they do not have control of their cash.  Businesses achieve a successful turnaround because they eventually recognise the position that they find themselves in and take the appropriate action and introduce a real and robust plan; a system of control and improvement, no matter how simple, and control of their cash, before it is too late.

In some overtrading situations, where the businesses are growing rapidly, control can be lost as they did not believe that they needed it.  The sales and money keeps rolling in.  In many situations, we have seen the business hit a wall, when either an unexpected cost arrives (usually the tax bill, but if you do not have a real plan then anything could be unexpected) or when they face a supply problem.  We have seen many situations where a business has one main source of supply for a key component, product or service and when this supplier cannot provide the volume or specification required (or has gone out of business themselves); this has the knock on effect to our business.  This may fall under risk management, but it is common sense management that many businesses fail to address until it comes along to hurt them.  Having one supplier for a key area can prove fatal, indeed one key supplier sometimes can wield too much power over the business anyway.

As any successful and experienced FD would also tell you, a real plan is not only about one area, and it is common-place that the FD is the architect of the plan and its delivery; it is about ensuring that all parts of the business have a plan and the ability to deliver the plan and this has to include;

  • Recognition of where you stand, your strengths and your failings, what are your opportunities and what needs to be protected;
  • A good product/service combined with a marketing plan to deliver the appropriate sales;
  • A good knowledge of key supply and a good supply plan and agreements;
  • An operational and delivery plan, recognising and controlling key drivers in the business;
  • Appropriate recognition of your team development, management and leadership;
  • A budget which includes the key performance indicators relevant to the business;
  • An appropriate financial plan recognising the requirements for long term investment and finance as well as working capital management and short term cash flow;

Recognising the above and how an experienced FD can help and yes that includes the creative marketing stuff as well, when a business is facing financial difficulty it is cash that has to be the key priority and when we start to help this has to be the first area to control.  Sometimes, however, a formal insolvency route of administration or receivership will be required to allow the business to be put back on track, but sometimes a common sense plan will enable a business to right itself without the need for a formal insolvency process.

Some of the areas that a turnaround strategy and plan will include will be:

  • A thirteen week rolling cash-flow dealing with immediate and short term cash flow issues, identifying and managing the pressure points.  It is still remarkable the number of businesses that do not have a short term rolling cash flow plan.
  • A cash plan, breaking down what cash has to be collected weekly from debtors and how; what are the priority of creditor payments and then more formalised revised repayment schedules agreed with key suppliers.
  • A detailed recognition of short and medium term cash requirements and following a draft cash plan, engaging with banks and other sources of credit and lending to bridge the shortfall.
  • Recognition of the break-even position of the business and translation of that into a simple and understandable plan (i.e. the number of sales required a week or the number of conversions needed or jobs needed to be completed every week).
  • Following the break-even review, a plan for staffing requirements with the current and future work.
  • A marketing and sales pipeline made into a simple and realistic plan of hot leads and conversions to sales.  Who are they, where are we with the contract progression (which also recognises the price and profits for the contract) and control of this sales lead flow and reporting.
  • A rolling 13 week marketing and sales plan, what is coming in for the next three months and what marketing initiatives are being put in place for week 13 and onwards.  Having worked in retail this is a very useful, practical and vital plan that addresses every week the initiatives being put in place for week 13.
  • A profit improvement plan, reviewing all key supply and support contracts and where necessary going back out to the market for competitive tenders.  Again the real benefits will be obtained from having a full and detailed understanding of what it is you need and use, volumes, product requirements and when required, to be able to fully specify the tender and obtain realistic tender proposals.
  • A medium and long term plan of what the business needs to develop, following on from recognition of the business strengths, what are the real unique selling points that the business offers and how these areas should be further exploited for the benefit of the business.

We are not saying that business turnarounds are easy or can always be done with a positive outcome in every situation.  Sometimes the business has left the position too long or the market in which they trade has shifted significantly and the business has not changed to reflect that.  In many situations, however, businesses that are failing or are hitting a rough time can be helped and turned around by practical and common sense measures.  The business owner, however, needs to recognise the issue, take a step back and consider what is happening.  Many times the businesses are just doing the same thing over and over again (very zombie like) and with only their fingers crossed expect to see improvements and things change.  This will not happen in the majority of times and a more measured and practical critique and plan will be required.

I think it is fair to say that not all accountants and advisers are the same and some of the areas outlined above do define how a good professional adviser can add real value and support to a business and can help that business to get back on its feet and achieve the success that it first set out to achieve.

 

Written by Steven Mugglestone

April 9, 2013 at 8:51 am

Key business grants & funding that are still available

leave a comment »


Key Business grants and funding that are still available

As a brief review and to help SMEs, we have identified a number of key grants and grant funding initiatives that are still available to SME businesses.

Technology Strategy Board and R&D

The Technology Strategy Board has started a new scheme which offers funding to SMEs to engage in R&D projects in the strategically important areas of science, engineering and technology, from which successful new products, processes and services could emerge.

Open from 4 April 2011, the Grant for Research and Development (Grant for R&D) scheme supports R&D projects which offer potentially significant rewards and could stimulate UK economic growth. In contrast to the Collaborative R&D programme, Grant for R&D funding is available to single companies.

Smart

Smart (previously known as Grant for Research and Development) is a Technology Strategy Board scheme offering funding to small and medium-sized enterprises (SMEs) to engage in R&D projects in the strategically important areas of science, engineering and technology, from which successful new products, processes and services could emerge.

The Smart scheme will support R&D projects which offer potentially significant rewards and could stimulate UK economic growth. In contrast to the Collaborative R&D programme, Smart funding is available to single companies.

We use the European definition of SME.  There are three types of grant are available:

Any UK SME working in any sector may apply; applications are accepted on a rolling basis for assessment by independent experts.

Smart replaces the Grant for R&D scheme previously offered by regional development agencies. The scheme works alongside existing programmes in Scotland, Wales and Northern Ireland.

Proof of market grant

This grant enables companies to assess the commercial viability of a project, through:

  • market research
  • market testing and competitor analysis
  • intellectual property position
  • initial planning to take the project to commercialisation, including assessing costs, timescales and funding requirements.

Projects will last up to 9 months, have a maximum grant of £25k, and up to 60% of total project costs may be funded.

Proof of concept grant

SMEs may use this grant to explore the technical feasibility and commercial potential of a new technology, product or process, including:

  • initial feasibility studies
  • basic prototyping
  • specialist testing and/or demonstration to provide basic proof of technical feasibility
  • intellectual property protection
  • investigation of production and assembly options.

It also includes pre-clinical research studies for healthcare technologies and medicines, including target identification and validation.

Projects will last up to 18 months, have a maximum grant of £100k, and up to 60% of total project costs may be funded.

Development of prototype grant

This funding is used by companies to develop a technologically innovative product, service or industrial process, and can include projects such as:

  • small demonstrators
  • intellectual property protection
  • trials and testing, including clinical
  • market testing.

Projects will last up to 2 years and have a maximum grant of £250k; up to 35% of total project costs for medium enterprises, or up to 45% for small and micro enterprises, may be funded.

Further information

All pre start-ups, start-ups, and small and medium-sized businesses from all sectors across the UK may apply for the Smart programme.

In future we may also run themed competitions using the Smart scheme, aligned with our priority investment areas.

Please note that the Guidance for Applicants have been updated and a new rule has been introduced from the open of Round 5. An individual business may only submit one project application per category (eg proof of concept) per round. If more than one application per category is submitted in a round only the first application submitted will be considered for funding.

http://www.innovateuk.org/content/competition/smart.ashx

The New RGF Grant Scheme with Bank Lending

The government has also announced details of the new Regional Growth Fund Grant Scheme which seeks to provide businesses with a grant amounting to 20% of the funding needed for a project, with the two major banks, RBS and HSBC providing the remainder as lending.

Full details of £95m of the government’s banking RGF assistance can be found on the BIS site at: http://lnkd.in/8R4wJV

The Regional Growth Fund (RGF) scheme is a £1.4bn fund operating across England from 2011 to 2014.  It is administered by the Department of Business Innovation and Skills:  http://www.bis.gov.uk/

Given the discussions that we are having with banks and that the total grant fund has been capped at £95million, we believe that small and medium sized businesses should act now and secure this major funding initiative before it runs out.

The Fund objective is to stimulate private sector investment by providing support for projects that offer significant potential for long term economic growth and the creation of additional sustainable private sector jobs – especially in areas which are currently dependent on the public sector.

RBS Group has secured £70m and HSBC has secured £25m of RGF to distribute to eligible customers.  This is open to customers acquiring eligible assets via a NatWest/RBS/HSBC loan and also through Lombard on a lease purchase agreement.

The scheme is designed to support the purchase of assets by providing a supplementary deposit contribution – this will take the form of a grant.

  • The minimum amount of RGF that can be applied for is £5,000
  • The maximum amount is £500,000 per customer group (i.e. including any group companies)
  • The RGF element cannot exceed 20% of eligible costs
  • This minimum amount to be funded after customer deposit and RGF is £25,001.

As the RGF element is a grant, no repayment is required unless the customer breaches any of the RGF criteria.

We are advising our current and future clients to contact us now to discuss how they can benefit from this valuable business initiative.


Steven Mugglestone BA FCA
,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317
steven@mcgregorsbirmingham.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

Written by Steven Mugglestone

February 13, 2012 at 10:11 am

Business Turnaround, a Dark Art or Common Sense and a Proper Business Plan

leave a comment »


Business Turnaround, a Dark Art or Common Sense and a Proper Business Plan

More than half of Britain’s small businesses collapse because of cash-flow problems. The UK Insolvency Service sites 65 common reasons why businesses fail.  Many advisers and “experts” publish lists of a number of reasons, seven being a common number, unlucky for the failed business, with clearly a prize and first place going to the Insolvency Service at 65, clearly retired exhausted after then.

We like to keep things simple as this helps us and our clients, but we believe that the success of a business (and therefore the failure of a business) is down to one area (ok, poetic license as it is a related area), cash flow problems due to the lack of a real plan and system of control (i.e. the area that an experienced business orientated FD is good at).

Looking at seven common reasons why businesses fail, it points to the same cause and solution:

  • Business started for the wrong reasons and to try and make money quickly (lack of a real plan and system of control)
  • Poor management and lack of management (lack of a real plan and system of control)
  • Lack of capital (lack of a real plan and system of control)
  • Poor location and marketing (lack of a real plan and system of control)
  • Lack of planning (lack of a real plan and system of control)
  • Over-expansion (lack of a real plan and system of control)
  • No website (lack of a real plan and system of control)

No apologies for labelling the point but all FDs would say the same thing, lack of cash caused by a lack of a real plan and system of control and improvement.  Other recent articles that we have read with interest now refer to zombie businesses and that pretty much sums it up, a re-animated corpse, with no mind of its own; no control of its own; in fact control lies with others; never learning and never changing. In fact a favourite observation of ours is the common lesson for most areas of human behaviour; “If you do the same thing that you have always done, you will always get the same result.”  This is as important to businesses as anything else.  In fact in business, if you do the same thing that you have always done, it is likely that the future results will be worse than before.  We do recognise that many also say; “If it’s not broke then don’t fix it,” but this is also ignoring both normal wear and tear and inevitable depreciation.

Speaking to and working with people who have experienced or been a part of a business failure (and those of us that have seen, have worked with and have been a part of successful turnarounds), there are a range of views and emotions, noting the lack of support from interested parties such as banks, other lenders and major creditors, but in the vast majority of these, there is a common issue, lack of a real plan, lack of innovation and change, lack of a system of control which leads to a cash flow crisis.  In fact the references to lack of support from the bank, when explored further, usually uncover a situation where the business has pretty much lost control to the bank or lender.  There are also a significant and scary number of businesses which only produce annual statutory accounts, find out that they have made a loss, months after the year end; face another issue, such as loss of a major customer or restricted key supply and then tell the bank all the bad news at the same time, asking for funding/overdraft extension, with no solutions being offered by them.  They lack any plan in respect of the relationship, communication and information being given to their bank and are confused and angry when the bank then either refuse the extension or worse still, reduce or remove the overdraft facility completely.  We are not going to comment on the issues surrounding banking over the last two years or so, as this is well documented, but we are aiming to concentrate on how businesses can and should take matters in their own hands and control.

As we are still in what can only be described as challenging and uncertain times for businesses, there are now many who describe themselves as turnaround specialists and look to help to ensure that your business starts on a road to recovery.

I will now make a sweeping generalisation and observation, but in my opinion, there appears to be broadly three types of turnaround specialists;

  • Investors and their advisers who are looking to save the business but also to take advantage of the vulnerable position of the business, to take part or majority ownership of the business for considerably less than normal market value, this is harsh but to be expected;
  • Insolvency experts acting as expert advisers (but usually only looking to support the lending bank).  The reports that they produce and advice that they give can be very biased for not only the lenders positions, but for them to win the future work from the lender, quite a lot of business people recognise this with the analogy of putting Count Dracula in charge of the blood bank and emergency blood supply;
  • There are, however, other experienced advisers who have been there, done that and have the necessary skills and desire to help the business turnaround and be successful.

Going back to the title of the blog, despite the mystery and myth of business turnaround specialists, it is not a dark art.  Businesses are successful because they have a good product; a real plan; a system of control and improvement and control of their cash, businesses fail because they may have a good product but they do not have a real robust plan; have no real system of control and improvement and they do not have control of their cash.  Businesses achieve a successful turnaround because they eventually recognise the position that they find themselves in and take the appropriate action and introduce a real and robust plan; a system of control and improvement, no matter how simple, and control of their cash, before it is too late.

In some overtrading situations, where the businesses are growing rapidly, control can be lost as they did not believe that they needed it.  The sales and money keeps rolling in.  In many situations, we have seen the business hit a wall, when either an unexpected cost arrives (usually the tax bill, but if you do not have a real plan then anything could be unexpected) or when they face a supply problem.  We have seen many situations where a business has one main source of supply for a key component, product or service and when this supplier cannot provide the volume or specification required (or has gone out of business themselves); this has the knock on effect to our business.  This may fall under risk management, but it is common sense management that many businesses fail to address until it comes along to hurt them.  Having one supplier for a key area can prove fatal, indeed one key supplier sometimes can wield too much power over the business anyway.

As any successful and experienced FD would also tell you, a real plan is not only about one area, and it is common-place that the FD is the architect of the plan and its delivery; it is about ensuring that all parts of the business have a plan and the ability to deliver the plan and this has to include;

  • Recognition of where you stand, your strengths and your failings, what are your opportunities and what needs to be protected;
  • A good product/service combined with a marketing plan to deliver the appropriate sales;
  • A good knowledge of key supply and a good supply plan and agreements;
  • An operational and delivery plan, recognising and controlling key drivers in the business;
  • Appropriate recognition of your team development, management and leadership;
  • A budget which includes the key performance indicators relevant to the business;
  • An appropriate financial plan recognising the requirements for long term investment and finance as well as working capital management and short term cash flow;

Recognising the above and how an experienced FD can help and yes that includes the creative marketing stuff as well, when a business is facing financial difficulty it is cash that has to be the key priority and when we start to help this has to be the first area to control.  Sometimes, however, a formal insolvency route of administration or receivership will be required to allow the business to be put back on track, but sometimes a common sense plan will enable a business to right itself without the need for a formal insolvency process.

Some of the areas that a turnaround strategy and plan will include will be:

  • A thirteen week rolling cash-flow dealing with immediate and short term cash flow issues, identifying and managing the pressure points.  It is still remarkable the number of businesses that do not have a short term rolling cash flow plan.
  • A cash plan, breaking down what cash has to be collected weekly from debtors and how; what are the priority of creditor payments and then more formalised revised repayment schedules agreed with key suppliers.
  • A detailed recognition of short and medium term cash requirements and following a draft cash plan, engaging with banks and other sources of credit and lending to bridge the shortfall.
  • Recognition of the break-even position of the business and translation of that into a simple and understandable plan (i.e. the number of sales required a week or the number of conversions needed or jobs needed to be completed every week).
  • Following the break-even review, a plan for staffing requirements with the current and future work.
  • A marketing and sales pipeline made into a simple and realistic plan of hot leads and conversions to sales.  Who are they, where are we with the contract progression (which also recognises the price and profits for the contract) and control of this sales lead flow and reporting.
  • A rolling 13 week marketing and sales plan, what is coming in for the next three months and what marketing initiatives are being put in place for week 13 and onwards.  Having worked in retail this is a very useful, practical and vital plan that addresses every week the initiatives being put in place for week 13.
  • A profit improvement plan, reviewing all key supply and support contracts and where necessary going back out to the market for competitive tenders.  Again the real benefits will be obtained from having a full and detailed understanding of what it is you need and use, volumes, product requirements and when required, to be able to fully specify the tender and obtain realistic tender proposals.
  • A medium and long term plan of what the business needs to develop, following on from recognition of the business strengths, what are the real unique selling points that the business offers and how these areas should be further exploited for the benefit of the business.

We are not saying that business turnarounds are easy or can always be done with a positive outcome in every situation.  Sometimes the business has left the position too long or the market in which they trade has shifted significantly and the business has not changed to reflect that.  In many situations, however, businesses that are failing or are hitting a rough time can be helped and turned around by practical and common sense measures.  The business owner, however, needs to recognise the issue, take a step back and consider what is happening.  Many times the businesses are just doing the same thing over and over again (very zombie like) and with only their fingers crossed expect to see improvements and things change.  This will not happen in the majority of times and a more measured and practical critique and plan will be required.

I think it is fair to say that not all accountants and advisers are the same and some of the areas outlined above do define how a good professional adviser can add real value and support to a business and can help that business to get back on its feet and achieve the success that it first set out to achieve.

Steven Mugglestone BA FCA,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317
steven@mcgregorsbirmingham.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

SME Businesses Should Act Now To Secure This Major New Grant Funding Before It Is Too Late

leave a comment »

The New RGF Grant Scheme with Bank Lending

The government has announced details of the new Regional Growth Fund Grant Scheme which seeks to provide businesses with a grant amounting to 20% of the funding needed for a project, with the two major banks, RBS (including Lombard Lease Finance) and HSBC providing the remainder as lending.

Full details of £95m of the government’s banking RGF assistance can be found on the BIS site at: http://lnkd.in/8R4wJV

The Regional Growth Fund (RGF) scheme is a £1.4bn fund operating across England from 2011 to 2014.  It is administered by the Department of Business Innovation and Skills:  http://www.bis.gov.uk/

Given the discussions that we are having with banks and that the total grant fund has been capped at £95million, we believe that small and medium sized businesses should act now and secure this major new grant funding initiative before it runs out.

The Fund objective is to stimulate private sector investment by providing support for projects that offer significant potential for long term economic growth and the creation of additional sustainable private sector jobs – especially in areas which are currently dependent on the public sector.

RBS Group has secured £70m and HSBC has secured £25m of RGF to distribute to eligible customers.  This is open to customers acquiring eligible assets via a NatWest/RBS/HSBC loan and also through Lombard on a lease purchase (hire purchase) agreement.

The scheme is designed to support the purchase of assets by providing a supplementary deposit contribution – this will take the form of a grant.

  • The minimum amount of RGF that can be applied for is £5,000
  • The maximum amount is £500,000 per customer group (i.e. including any group companies)
  • The RGF element cannot exceed 20% of eligible costs
  • This minimum amount to be funded after customer deposit and RGF is £25,001.

As the RGF element is a grant, no repayment is required unless the customer breaches any of the RGF criteria.

We are advising our current and future clients to contact us now to discuss how they can benefit from this valuable business initiative.

Steven Mugglestone BA FCA,
Finance Director Services
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659                T: 0121 236 3317
steven@mcgregorsbirmingham.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

Written by Steven Mugglestone

November 17, 2011 at 9:45 am

Does your Accountant really have the Ability and Experience to Help Grow Your Business?

leave a comment »

Does your Accountant really have the Ability and Experience to Help Grow Your Business?

And we mean really helping your business grow …….

Ask yourself the question; what should a business look for in an Accountant and Business Adviser to provide your business the advice and support it needs to really grow and prosper?

McGregors Corporate can provide the answer and the real difference, Ability and Experience, delivered by innovative and very approachable finance professionals: Ability and experience ….

  • …. to grow and drive your business with the skills of a commercial Finance Director
  • …. to provide strategic marketing and sales opportunities to grow your business organically
  • …. to control and report your business with the skills of commercial auditors
  • …. to obtain finance to ensure your business continues to grow
  • …. to provide innovative tax saving structures with the skills of imaginative tax specialists
  • …. to control and reduce your costs with utility, insurance and other key supplies associates
  • …. to provide innovative structures to protect and grow your wealth with commercial wealth management specialists
  • …. to maximise your wealth and value of your business when the right times comes for you to sell or retire
  • .… and we hope you will enjoy our company over a drink or two,….even if it’s only a coffee.

Our principals’ backgrounds and experience include many years with international accountancy practices and as commercial financial directors.  We have helped start and build businesses; raise funds from banks, private equity and stock exchange.  We have re-structured and re-launched businesses and helped turn around businesses facing trading issues and we have helped business owners maximise the value of their business when the time is right to sell.

Our aim is to provide the quality, experience and range of service of an international firm at the cost of a local practice, all delivered by really nice people.  With McGregors Corporate, our Ability and Experience will prove to be the real difference.

Ask yourself again, does your accountant really have the Ability and Experience to help grow your business?

Steven Mugglestone BA FCA,
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/contact-us.html
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659
T: 0121 236 3317

When sources of finance remain tight, consider the power of the ORBS

leave a comment »

When sources of finance remain tight, consider the power of the ORBS

It is fair to say that business remains tough for all and we are still are not seeing a glimmer of light at the end of the tunnel that is this current recession, down-turn, economic slow-down or whatever you wish to call it.  In fact it is difficult to see where and how the UK economy will re-build itself and return to significant growth.

Having many years ago studied Economics as a degree, I returned to some research on the economy and found only the following.  “The Economy is so bad that . . .

  • I got a pre-declined credit card in the mail.
  • I ordered a burger at McDonald’s and the person behind the counter asked, “Can you afford fries with that?”
  • Chief Executives are now playing miniature golf.
  • If the bank bounces your cheque or direct debit because of “Insufficient Funds,” you can call them and ask if they meant you or them.

It is no doubt that things remain challenging.  From our experience, the availability of cash and funding remains to be tight and businesses looking to either start up new areas or expand are still find sourcing finance as a real challenge with lenders and investors remaining extremely cautious.  Many businesses cannot find either longer term investment or working capital to build or re-build their businesses.

As a principal in a firm of Chartered Accountants and Business Advisers and working closely with FSA regulated colleagues and associates, one area, however, that we have seen to be proving as a possible solution is through the power of the ORBS, or an Occupational Retirement Benefit Scheme.

ORBS, what are they or what is it?
ORBS is basically a pension scheme that has been designed to provide shareholding directors of a company with the maximum amount of flexibility in their pension planning at the same time generating tax incentives either for the company or the individual and still providing valuable pension benefits for retirement.

Current UK legislation
The UK Government has recently introduced changes to current pension legislation, which has important consequences, in particular for entrepreneurs.

As of April 2011, the maximum contribution that may be made either corporately or personally is £50,000, but with the option to carry back up to 3 tax years.  This means that up to £200,000 could be contributed to a pension plan for each director, all of which should be deductible against corporation tax in the 2011/12 tax year (Corporation tax currently at 29.75%).  As from April 2012 it has also been announced that the maximum an individual can hold in pension funds is £1.5m.

So why consider ORBS for a pension?
In the past, most company directors and entrepreneurs have used either Self Invested Personal Pensions (SIPP) or a Small Self-Administered Scheme (SSAS) for their pension contributions.  Both of these structures, however, are restrictive.

A key restriction is in terms of re-investing back into either their own or a new business venture.  As a consequence, any pension contributions tend to be small as often company cash flow does not permit larger contributions as capital is effectively tied up.

ORBS help to resolve this problem in a number of unique ways, which allows for the larger contributions without necessarily affecting cash flow, while providing an effective low risk tax planning strategy.  We have found that many entrepreneurs and businesses are using and considering using ORBS to help provide the necessary cash for their business to help them with both longer term investment and working capital requirements.

A real help is the use of existing pensions in your business
The ORBS is a fully registered scheme with HMRC.  This means that ORBS can receive transfers from existing pension schemes that may be held.  These monies can then be used within the structure, to help the business grow or help with business acquisition and even commercial property purchase.  The ORBS pension structure has been designed to provide maximum flexibility whilst still adhering to current pension rules.

The ability to deal with business disposal and retirement
All of the funds in the ORBS belong to the members and will have been allocated according to members direction.  All members are free to make their own investment decisions and take retirement benefits when they wish to do so, subject of course to the minimum retirement age of 55 in the UK.

Tax incentives and cash on retirement
A member can access up to 25% of their fund, held through ORBS as tax free cash, whilst also providing access to, “income drawdown” or “scheme pension facility” to provide maximum flexibility for retirement planning.

We are now seeing the use of ORBS in many businesses and we are seeing that they are providing crucial funds to really help businesses expand and invest.  We work with FSA regulated and ORBS specialists providing real solutions to our clients in these most challenging times.

Maybe ORBS will provide the light or at least the spark at the end of the tunnel after all.

In summary the key features for ORBS are:
•    They are fully registered pension with HMRC
•    They are a highly flexible business planning opportunity
•    They provide tax relief on contributions
•    They accept transfers from existing pension plans
•    They provide total flexibility in retirement

Steven Mugglestone BA FCA,
McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/contact-us.html
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659
T: 0121 236 3317

steven@mcgregorsbirmingham.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.

Written by Steven Mugglestone

August 30, 2011 at 9:35 am

Birmingham Chamber of Commerce Business Finance Surgery returns 6th September 2011

leave a comment »

Birmingham Chamber of Commerce Group in partnership with
NatWest and McGregor’s Corporate Chartered Accountants

Monthly Finance Surgery – Access the finance and advice you need for your business
.

Next Dates
: Tuesday 6th September 2011
Time: 9.00am – 3.00pm
Location: Birmingham Chamber of Commerce, 75 Harborne Road, Birmingham, B15 3DH

The Birmingham Chamber of Commerce Group in partnership with NatWest Commercial Bank and
McGregors Corporate Chartered Accountants is offering SMEs the opportunity to ‘ask the experts’ on a one to one bases about their business finance and funding needs.   Individual appointments are available for a one to one review and discussion with both a commercial and corporate bank funder and commercial chartered accountant/finance director.

Bank funding:
• Choosing the most appropriate funding solution for your business.
• The importance of having a clear rationale for the funding you need.
• Support regarding how a bank approaches the assessment of your funding application

Alternative methods of finance: 

  • How to work with your accountant to explore funding and growth options.
• What to expect from your appointed accountant
• How to get the most from venture capital and small private equity investment.
• How to improve your finance function and how your accountants can be your finance director

This is the opportunity for you to access free consultations and funding reviews and to question the experts on issues affecting your business.   If you are an SME business with T/O above £1m and you would like to register your interest for this event please contact:

Rachel Flanagan
T:         0121 607 1836 

E:        
r.flanagan@birmingham-chamber.com 

Steven Mugglestone BA FCA
www.mcgregorscorporate.co.uk

McGregors Corporate, Entrepreneurial Chartered Accountants and Business Advisers
…….Really good for your business

McGregors Corporate are a Member of Probiz Tax, providing Innovative Tax Solutions to Owner Managed Businesses.

http://uk.linkedin.com/in/stevenmugglestonefca/
http://twitter.com/McGsCorporate
http://www.youtube.com/watch?v=nhC0wlglePE
http://www.mcgregorscorporate.co.uk/

T: 0845 519 5659
T: 0121 236 3317

steven@mcgregorsbirmingham.co.uk

Connect, call, talk, email, contact us, send a messenger pigeon and arrange a discussion, review and free meeting.