Contents

Our offer Your Idea Business Planning Finance Legislation Social Enterprise Marketing Plan Contacts 1 2 3-7 8 9-13 14 15 16-19

Disclaimer This information is intended to give an overview and introduction to the subject. Any legal information is provided for guidance only and should not be regarded as an authoritative statement of law. Barnsley College cannot be held responsible for any actions taken as a result of this guide.

Our Offer
Barnsley College has an array of support to help you start your business. The Enterprise Department is here to help you realise your dreams and turn your ideas into reality. Whether you have products ready to sell or have a brilliant idea for a business you want to explore, come and have a chat with us. The support on offer includes: Workshops on starting a business, nance and legislation 1 to 1 support with a Business Adviser Access to Industry Specialists Opportunity to test trade your product or service Financial Support www.barnsley.ac.uk/Enterprise enterprise@barnsley.ac.uk 01226 216 840 /ezonebarnsley @ezonebarnsley

Your Idea
What do you want to do? What can you make? What will people buy? What services can you offer? Not everyone has to have the next big thing. Its a case of looking at your skills and working out how you can use them. Your business will centre on an idea, a product or service which you believe has commercial value. Before you launch into setting up your business you should consider: How strong is your idea? Who else is doing it? Is it a niche market? Are you able to offer a quality product/service? If it hasnt already been done and nobody is doing it, why? Is it something you enjoy doing? If you are going to be doing it 24/7 will you remain positive about it?

A business has to be involving, it has to be fun, and it has to exercise your creative instincts.
-Richard Branson

Business Planning
All good businesses take time to sit down and look at where they are heading, what their future looks like and to ensure that they remain relevant to the industry they are operating in and continue to provide a service that is what their customers are looking for. With the current economic climate as it is, it is more important than ever that those looking to start a business and those with established enterprises take time to plan in order to move the venture forward. There are a number of other reasons why a business would look to write a business plan, these can include: Raising nance for the business Securing investment from a third party In order to tender for a piece of work Whatever the reason is for the plan being produced you should always consider rstly who is going to read it and tailor it to their individual needs. For example if you are applying to the bank for a loan they will want to see nancial gures throughout the plan and will want these to be based on research and accurate forecasts.

Business Plan Contents

Executive Summary The executive summary should be the last part of the business plan which is written but becomes the rst page in the business plan which is read. This is because it should summarise the business plan on one page in a concise manner enticing the reader to want to know more. It should set out an agenda for the business plan and touch lightly on all aspects including setting out the proposition to the reader of what you are asking them for, be it nance or investment. As it is a summary of the plan it makes sense that until you have completed writing the business plan you wouldnt know what to include in the summary. You should also consider here the markets or industries that your product is aimed at, for example, young people, women or individuals with disabilities. Description of the Business The description of the business is probably the best place to start when writing a business plan. This is your opportunity to explain what it is that you as a business are going to offer. You can also use this space to explain why you are different to other people offering a similar service. This is called your Unique Selling Point (USP). This could include any number of factors which differentiate you from your competitors including: A better quality service or product A fast service Lower prices A new innovative product or service

Innovation distinguishes between a leader and a follower.

-Steve Jobs

Business Plan Contents

Market Analysis Once you have explained what your business is going to offer, and to which markets, you should then look at the market you are entering. Who are the key people in the industry? Who will your main competitors be? You should look at how you differ to them and list their strengths and weaknesses. Local competitors will only form a small part of your industry. What is the rest of the industry doing, nationally and globally? This is your opportunity to explain how you are going to overcome issues that are facing the industry as a whole and show that you understand how your industry is represented in the local area. Service or Product Now that we have looked at the industry you are entering, and what the business will look like, it is your opportunity to discuss the products and services that you are going to offer. If it is a singular offer, for example you are manufacturing one product or a range of similar products then you should consider talking about the suppliers who are going to provide you with the materials to manufacture your product to show that you have researched the supply chain. Retail businesses should discuss the range of products that they are going to sell and group them by type but providing enough detail so that the reader can envisage the products.

Business Plan Contents

Marketing and Sales Before you can talk about how you are going to advertise your product or service, you need to show that you understand who it is you are aiming your product at. Not everyone will want to buy from you for one reason or another and so you need to show that you have thought about who is most likely to want the product or service. One way of doing this is to create a prole of your ideal customer or the person you believe your product is best aimed at. This can include gender and age, but can also look at their social circumstances for example whether they are married, have a professional career or are parents. You do not just have to have one prole for your product as there may be a variety of different groups who would want to buy from you for different reasons. For each prole you create you can then do a number of things with the information: 1. Start to understand the proled group by looking at the following areas: a. What do they base their decision to buy on? Eg. time, price or quality b. How do they buy products? Eg. Online or through retail outlets c. Where do they look for a service? Eg. Yellow Pages 2. You can decide how it would be best to advertise your product or service so that the message of the advertising best reaches your targeted customers. For example if your product or service is targeted towards females - would there be any point in putting up a poster in a barbers shop?

Business Plan Contents

Marketing continued Now that you have customers interested in your offering, how will you make sure the sale takes place? If you will be selling face to face, customer service becomes a high priority to get right so that people remember you and want to come back to you for custom. Knowledge of your product or service, politeness and not being too pushy go a long way to instilling condence in your customer that you are the right person for them to buy from. If you are selling through a website, you have to be clever about how you complete the transaction to instill the same level of condence. Good communication, an easy purchasing process and polite text can go a long way to convince a person to buy. One thing to bear in mind is that by not being present at the time of the transaction, how can you answer any questions that the customer might have? This is why retailers add Frequently Asked Questions to their websites.

Finance
Money is the life blood of a business, if you arent making money, this can put the business in jeopardy. Knowing your business nances from how much stock you are holding, how much products and services cost to knowing the prot margin on each item is imperative to ensure that the business is run properly. If the purpose of your business plan is to raise nance to start your business there are several key pieces of information that any lender will look for: Survival Budget How much it costs you as an individual to live a basic lifestyle including rent / mortgage, utilities, food etc. Start-up Costs How much money do you need to raise in order to start the business? Including equipment / space / product and the amount of funding you already have in place whether from personal savings, family or from lenders. Price and Cost The price it will cost to buy / create the product / deliver the service and how much you will then charge the customer. Cash ow Forecast A 12 month (can be 24) forecast looking at the running costs of the business against your predictions for sales on a month by month basis. Prot and Loss Forecast Similarly to the cash ow forecast it should look at 12 months but whereas the cash ow forecast deals with money in and money out, the prot and loss looks at the value of the business taking into account for example value of stock held and assets within the business.

Legislation
Business types Before you start trading you need to make a decision as to what legal form your business is going to take. This decision will affect who monitors your business, what tax you will pay, what level of control you have over the business and your personal liability regarding the venture. There are three main forms in the United Kingdom which are: Sole Trader This is a business owned by one person who has registered with Her Majestys Revenue and Custom (HMRC) to undertake a self-assessment. The business has no dealings with Companies House, and all prots made belong to the self-employed owner. Tax at the normal income tax rate is paid on prots made by the business, but all debt held against the business also sits against you as an individual. Please see here for further details: https://www.gov.uk/set-up-sole-trader

Partnership If you are starting the business with someone else, you may want to consider setting up a partnership. In effect a partnership is where two or more sole traders are working together under a formal partnership agreement. Individuals are still liable for their share of prots and debts within the partnership and pay tax as per a sole trader above. Please see here for further details: https://www.gov.uk/set-up-business-partnership

Legislation
Business types continued Private Limited Company A Limited Company is a formal separate entity from your personal nances. This means that the debts the business holds stay with the business and do not encroach on your personal nances. In effect as director of the business you are an employee but can retain the rights to govern the business. The business will be registered with Companies House and subject to their standards and practices. As an employee of the business you will pay income tax on your wages; however there are other tax efcient ways of removing monies from the business. The company will also be subject to corporation tax. Please see here for further details: https://www.gov.uk/limited-companyformation & http://www.companieshouse.gov.uk/ There are various other forms of business which can be set up including: Private Limited Company by Guarantee Private Unlimited Company Public Limited Company For Information on the above go to: https://www.gov.uk/business-legal-structures/limited-company Limited Liability Partnership Limited Partnership For information on the above partnership style forms go to: https://www.gov.uk/business-legal-structures/limitedpartnership-and-limited-liability-partnership Unincorporated Association For information on an unincorporated association go to: https://www.gov.uk/business-legal-structures/unincorporated-association

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Legislation
Financial Alongside managing your day to day cash ow and nance as a trading business in the United Kingdom you are duty bound to pay certain taxes based upon the nances of the business. You will need to pay and declare tax on your income and prots however this will depend on the type of business you start up, if you have any staff and depending on your revenue whether you need to register for VAT. Income Tax Taxable income from employment and self-employment. With self-employment the amount paid is based upon your self-assessment of how much prot you have made after all business related expenses have been paid. National Insurance Paid to build up entitlement to certain State benets including the State Pension. The amount paid is based upon the amount of income. Corporation Tax Tax paid on a limited companys taxable prots. Value Added Tax (VAT) VAT is a tax paid on most goods and services supplied in the UK, paid by companies that are VAT registered.

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Legislation
Financial continued Other taxes which you as an individual or your business may have to pay include: Stamp Duty Capital Gains Tax Importing and Exporting Duties All of the above taxes are paid to Her Majestys Revenue and Custom (HMRC); for further information on rates of tax, which taxes you are obliged to pay and for guidance have a look at: www.hmrc.gov.uk Business Rates - As a trading venture operating in your local area you may also have to pay business rates which are paid to help pay for local services. You would most likely have to pay business rates if you use a building or part of a building for non-domestic purposes. Unlike the other taxes mentioned, business rates are paid to and managed by the local council where your business is based. For further information on business rates please look here: https://www.gov.uk/introduction-to-business-rates/overview

Your most unhappy customers are your greatest source of learning.

-Bill Gates

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Legislation
Insurance As in day to day life, we have to protect ourselves and our businesses against unforeseen circumstances. There are several insurance products available to business owners to protect themselves and the continual trading of their businesses against the unknown. In some industries it is a requirement for you to have certain insurance and so it is always wise to check with your regulating body as to their opinion. The most common insurance policies taken about by businesses are as follows: Public Liability Insurance Protects the business against compensation claims and legal action against the business. Professional Indemnity Insurance Covers the cost of compensation to clients if your professional advice has caused them to lose money or business. Product Liability Insurance Covers the cost of compensation to anyone who is injured, or whose property is damaged because of a fault in a product that you manufacture or supply. There are many other insurance products which may be useful and are sometimes targeted towards specic industries. Also dont forget if you are using your personal vehicle for trading purposes it should be covered by business insurance. For details about insurance policies you can purchase for your business and to talk through your requirements, speak to an insurance broker: http://www.biba.org.uk/CustomerHome.aspx

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Social Enterprise
Not all businesses are set up with the sole aim of creating money for their owners and shareholders. Social Enterprises are businesses which are created with social aims where the prots are used for charitable, social or community purposes as opposed to going to shareholders. These differ from ordinary businesses that have social aims as Social Enterprises are governed to ensure that they stay true to their purpose. One of the key things to remember with a social enterprise is that rst and foremost they are a business and so have to be viable and able to trade in order to support their social activities. Social Enterprises have their own designated structures which are similar to those of an ordinary business: Community Interest Company Set up to benet the community rather than the shareholders, registered through Companies House, you create an asset lock which is a legal statement allowing the companys assets to only be used for social objectives. Company Limited by Shares Not specically designed for Social Enterprises but can be adapted. Again set up through Companies House. Company Limited by Guarantee These do not have shareholders, instead they have members. As the members are guarantors not shareholders, they cannot benet from any increased value of the company. For more information on setting up a social enterprise see here: http://www.socialenterprise.org.uk/

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Marketing Plan
In your business plan you would have discussed your marketing and advertising. It is often advisable to create a separate more thorough marketing plan to compliment your business plan. Marketing is what draws people into your brand and your business and moves them to buy from you. Without marketing and advertising your business may as well be hidden from sight, begging the question how do people nd out about you? Drawing on what we discussed earlier regarding identifying who it is you think is most likely to buy from you, you can create a full campaign across 12 months which shows how you envisage targeting potential buyers.

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Useful Contacts and Links

Information and Regulation Her Majestys Revenue and Custom (HMRC) Information, advice and regulation of sole-traders, partnerships, taxes and National Insurance for all UK based enterprises. www.hmrc.gov.uk Companies House Regulatory body which incorporates and dissolves limited companies, stores and examines information in relation to the Companies Act and makes this available to the public. www.companieshouse.gov.uk Intellectual Property Ofce Ofcial government body for responsible for Intellectual Property (IP) in the United Kingdom. www.ipo.gov.uk Support organisations The Princes Trust Practical support for young people in need of it most around skills development, condence and motivation. www.princes-trust.org.uk Prime Supports mature entrepreneurs (Over 50) to set up their businesses. www.prime.org.uk Shefeld PATLIB Centre Intellectual Property and Business Information advice information.library@shefeld.gov.uk

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Useful Contacts and Links

Support organisations continued Business and Patent Information Services; Leeds Library Business and Intellectual Property advice www.businessandpatents.org Social Enterprise Yorkshire Organisation for individuals and groups exploring setting up a social enterprise. www.seyh.org.uk UK Trade and Investment UK Trade and Investment (UKTI) work with British businesses to ensure their success in overseas markets. www.ukti.gov.uk Finance and Professional Services Finance Yorkshire Finance Yorkshire offer seed-corn nance, business loans and equity-linked nance from 15,000 to 2 million for businesses in Yorkshire and Humber. www.nance-yorkshire.com Yorkshire Association of Business Angels Yorkshire association of Business Angels (YABA) are an organisation who put private equity investors in touch with businesses looking for nance. www.yaba.org.uk Institute of Chartered Accountants for England and Wales Register of accountants. www.icaew.com

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Useful Contacts and Links

Finance and Professional Services continued British Insurance Brokers Association Register of Insurance brokers for all forms of cover. www.biba.org.uk Lawyers for Your Business Scheme run by the Law Society offering businesses half an hour free legal consultation. www.lawsociety.org.uk/lfyb/ Membership and Networking Organisations Barnsley & Rotherham Chamber of Commerce Membership organisation for businesses in the Barnsley and Rotherham areas offering support to its members. www.brchamber.co.uk Doncaster Chamber of Commerce Membership organisation for businesses in the Doncaster area offering supports to its members. www.doncaster-chamber.co.uk Leeds and North Yorkshire Chamber of Commerce Membership organisation for businesses in Leeds, York and North Yorkshire offering support to its members. www.yourchamber.org.uk Mid Yorkshire Chamber of Commerce Membership organisation for businesses in Hudderseld, Halifax and Wakeeld offering support to its members. www.mycci.co.uk

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Useful Contacts and Links

Membership and Networking Organisations Shefeld Chamber of Commerce Membership organisation for businesses in Shefeld offering support to its members. www.scci.org.uk Federation of Small Businesses Membership organisation offering support, networking opportunities and discounts to its members. www.fsb.org.uk Women in Rural Enterprise Membership organisation offering support to women who are running enterprises in rural areas. www.wireuk.org Forward Ladies Membership networking organisation for ladies in business offering support and advice. www.forwardladies.com

Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.
-Thomas A. Edison

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Notes

www.barnsley.ac.uk/Enterprise enterprise@barnsley.ac.uk 01226 216 840 /ezonebarnsley @ezonebarnsley