Category Archives: Government support

Could the “Experts” be right about Brexit?

Expert on financeIn an alarming development Britons are starting to wonder if the “so called experts” might have something going for them.

We’ve believed for years (well ever since Michael Gove revealed in his Brexit speeches that experts are always wrong) that people who have studied a subject for decades can’t be right.

Tony Simonds, retired Sales Executive said: “The so-called experts are always telling you things are bad for you, and it was only after my second heart attack that I thought their advice about not having deep-fried black pudding for breakfast is probably correct.

“They might be right about smoking too, so I’m going to look into that, although it flies in the face of lots of stories about people who smoked 80 Capstan a day and lived to 100.”

Store Manager Vicky Thompson said: “I’d always assumed experts just liked sounding important.

“However that advice about leaving a safe distance between you and the car in front turned out to be correct. I’ll definitely be telling my friends once the concussion’s worn off.”

The public is now grudgingly accepting that experts may have valid opinions on other subjects, such as patting tigers, swimming far out to sea and even the state of our economy after Brexit

However, Van driver Nick Baker said: “There’s only one sort of experts I trust and that’s UFO experts. Finding out all that highly classified government information takes a lot of work and you have to respect that.”


With acknowledgements to thedailymash


Are you ready for investment?

Being investment readyBeing investment ready is key to getting funding. Yet when talking to entrepreneurs they often have not taken the time to think it through.

You are up against a lot of competition for business investment. Some may be better prepared than you to give the potential Investor confidence that his investment will be well spent and payback a healthy return.

So what can you do to be ready for an Investor and how can you give yourself the best chance against the competition?

  •  Business Plan. Okay there is a ton of information on this available, including on this site so I’m not going to go into how to do a plan (see the links below). Just to say that you will benefit from having one:
  1. Putting a plan down on paper forces you to think through what you are doing. The market, your offering, sales & marketing, putting together an experienced team, the business model and finances
  2. It provides a basis for discussions
  3. Shows Investors that you are professional, serious about the project and are thinking of every aspect of the business
  4. Investors cannot see everyone; they will want to first have a few pages (Exec Summary) of a business plan and then follow-up the ones with which they are interested.

Getting started on a Business Plan

Structure of a Business Plan


  • If an existing business:
  1. Make sure that what you are doing at the moment is profitable, if not profitable show why it will be
  2. Build your revenue with a sales drive to show the business to its best effect
  • For start-ups:
  1. If based on a new type of product, make a prototype
  2. Show it is not just a good idea, but that it will actually sell by getting positive customer comments, or letters of intent to order.
  3. Produce a market survey that supports your product or service. Don’t simply say “everyone I’ve asked likes it”.
  • Be able to explain in a couple of sentences what your business does, its advantages over the competition, how it will make money and who its customers will be. Have evidence to hand to support your numbers.
  • Know what you are going to spend any investment on. Make sure that it’s not just to pay you a salary, or all thrown at marketing.
  • What role will you expect the Investor to take, some are looking for an active role in the company, some only expect to give advice, very few will consider just giving funding and stepping back completely.
  • How will the Investor get a return? A sale of the business, a buy back of shares, interest /dividend payments? Over what time?
  • Look at government Investor incentives. In the USA there are quite a few States that are trying to attract businesses, basing your company in that area can give tax advantages to the company and potential Investors.
  • These are attractive to potential Investors and may make the difference in choosing your opportunity or someone else’s. A quick way of getting a foothold on to these incentive schemes and be able to show Investors the potential, is to get a statement from the Inland Revenue (HMRC) that your business is likely to qualify for the scheme called a EIS Advanced Assurance

Finding investment is not necessarily quick. Realise it will take time and energy. Be persistent and turn over every stone to find the right investor that understands your market and is excited by the team and opportunity that you have.


SEIS Seed Enterprise Investment Scheme

2012 Budget SEISAs promised the chancellor has confirmed in his March budget documents that there will be a Seed Enterprise Investment Scheme (SEIS) starting from 6th April 2012, although it didn’t get a mention in his actual speech.

Just to clarify for anyone confused by the similarity of SEIS with an existing scheme, there is already an Enterprise Investment Scheme (EIS) which targets larger businesses rather than start-ups.

This big brother to the SEIS also received good news in the budget, with the qualifying size of a company moving from a maximum gross asset size of £7 million with 50 employees, to £15 million with 250 employees. This means later stage investment prospects will now qualify for EIS (see EIS for more information).

The basic information that I covered on my last blog on the SEIS remains unchanged, so I won’t go over that again. Suffice to say it is worth ensuring that your new business qualifies (not all industries do – eg. Property development and financial services) and publicise to potential Investors that they can get tax relief by investing in your business.

Clearly for Investors it’s a no-brainer that you should utilise this new scheme for your investments.

So how do you make use of it?

Luckily those nice people at HMRC have put together a fairly comprehensive web-page that explains the SEIS and how to apply for it. See

They are careful to say that although the scheme starts on the 6th April, until the budget gets Royal Assent (around July) it isn’t set in stone, but it’s unlikely to alter in my view.

The HMRC web-pages have a section on how to get advance assurance that your business and the shares that you are going to issue to an Investor will qualify. It can be useful to do this in making your opportunity attractive.


SEIS Start-up Investment

Business InvestmentSEIS (Seed Enterprise Investment Scheme) is a new government incentive to help UK start-ups and young companies.

It starts in just a few weeks on April 6th, so now is a good time to start building this into your funding plan for your start-up. Or if you are an Investor, have a look to see if this will be applicable to the businesses into which you are investing.

There has been a similar incentive around for some time now (see EIS) but the SEIS is specifically targeting new companies.

The details will come out in the Chancellors budget speech next week (21st March), but these are the basic points:

  • The business must be new, or 2 years old or less, with fewer than 25 employees. It must have less than £200,000 of gross assets and not quoted on a stock market.
  • Directors or executives cannot use the scheme to invest in their own companies.
  • You can raise up to £150,000 of funding through the SEIS, but mustn’t have already raised any money under EIS or venture capital trust (VCT) schemes. This is in total not per year.

An Investor can have up to 30% of a share in the business under this scheme. The SEIS makes it attractive for an Investor to fund a start-up because of the number of tax reliefs that they would receive:

  1. Investors can claim back income-tax of 50% of the amount invested.
  2. An Investor can have a ‘capital gains tax holiday’. Capital gains tax (CGT) can be avoided on any asset sold during the financial year 2012-2013 as long as they reinvest the proceeds in a SEIS eligible start-up in the same year.
  3. The combined effect of the CGT holiday and the income tax break gives relief of up to 78% in the first year.

There is as you can imagine, a number of detail points that would need to be investigated but this should whet your appetite. It’s well worth while finding out more about the scheme either to make your new business attractive, or to maximise your investment returns.

After the chancellor has given final details next week, I’ll do a summary here and point you towards the required forms that the revenue will need to be completed.


Government Support for Small Business

Small Business supportAm I the only one that is getting confused by the increasing number of initiatives that the government is rolling out to encourage entrepreneurship? Or frustrated because they don’t actually seem to make a difference?


We had Business Link, then we didn’t, except it still exists as a “business advice and guidance service portal”.

The Small Firms Loan Guarantee scheme (SFLG) has been around for decades and continues to help companies that need a bank loan. Or it would if the banks fulfilled their part of the deal by releasing the funds.

To encourage them to do so the government set up Project Merlin last year whereby the banks agreed to lend £76B specifically to small firms. However it has been a failure and banks are still holding on to their money. Now Merlin looks like being dumped along with any credibility that the banks could have gained by making good on their promises.

For some time now we’ve had the Enterprise Investment Scheme (EIS) to encourage Investors, by giving them various tax breaks if they help to fund growing businesses.

In addition last year the Chancellor announced the Seed Enterprise Investment Scheme (SEIS) due to come into effect on the 6th April 2012. This is aimed at small start-ups and gives a 50% tax relief to Investors. I’ll do a write up of that shortly, but it looks promising in motivating Investors.

Enterprise Zones were introduced to mixed response and the jury is out on their long-term effectiveness.

The Government has pushed StartupBritain which they call “a national campaign by entrepreneurs for entrepreneurs, harnessing the expertise and passion of Britain’s leading businesspeople to celebrate, inspire and accelerate enterprise in the UK”. Fine words – but never-the-less just words.

Talking about fine words, recently the latest campaign is “There’s a business in you”, which provides inspiring stories and highlights support available. However most of the highlighted support simply takes you to the Business Link website.

Then there’s talk about cutting Red Tape. There is a “Red Tape Challenge”, where members of the public can suggest red tape to be cut and a “1 in, 1 out” idea that says if a department wants to bring in a piece of legislation, they must first remove one. Latest government news is that there have been 19 in and 33 out, saving small businesses £3.2 B a year. What shall we spend it on?

How about making tax simpler and easier to understand I hear you say. Well there’s a government office called “The office for Tax Simplification”. Yes there really is, let’s hope they are successful.

So is it all spin and gimmicks as some business experts have commented, or a well co-ordinated and ambitious campaign to release the entrepreneurial spirit in us all and make Britain great again?


Make IT compulsory – get more start-ups.

Young high-tech start-up businessesI must admit this blog sounds a bit as though I’m standing on a soap-box, but a recent comment by Google’s chairman, Eric Schmidt, rang true with me. He said:

“I was flabbergasted to learn that today computer science isn’t even taught as standard in UK schools,” he said. “Your IT curriculum focuses on teaching how to use software, but gives no insight into how it’s made.”

Yes I thought, he’s right. We teach how to use software, not how to make it.

This made me think, would teaching Information Technology as standard make a difference to our ability to innovate in a high-tech world?

Innovation has always driven the economy. Just look back to the Industrial Revolution and the inventions that abounded, they were that time’s high-tech.

Today’s innovation tends to centre on software, electronics and biotech, all of which require not just a grasp, but actually a fairly good understanding of the principals behind these technologies. The sort of understanding that can then be used to develop new innovative businesses.

However, schools have increasingly concentrated on “soft” subjects and reduced the time spent on what is thought to be more difficult areas such as science, maths & technology.

I know that we are short of science and maths teachers and the need to meet higher and higher pass rates every year means that schools concentrate on courses that are not as exacting.

It doesn’t have to be this way; though it will require government willpower to change.

We’ve seen an enthusiasm for entrepreneurial activity, with programmes like Dragon’s Den and The Apprentice. Nearly all young people have a passion for the uses of technology, with Facebook and iPhone Apps.

So why not put a fresh emphasis on learning why an iPhone works and how to programme an application like Facebook, not just how to use them. Then we may be producing the future innovative entrepreneurs that the economy demands.


Enterprise Zones – what are they and will they help?

Enterprise ZoneEnterprise Zones are the latest government incentive to get businesses growing. Within the Enterprise Zone you can get superfast broadband, lower rates & taxes, and low levels of regulation & planning controls.

That can only be a good thing – right? A great encouragement for younger companies who may otherwise struggle to reach critical mass.

Maybe, however there is considerable criticism of this approach also. Firstly it’s not new. Maggie Thatcher tried exactly this in the 1980’s. They provided a boost at the time that wasn’t able to be sustained.

Critics argue that all the Enterprise Zones do is to displace jobs from one area to another, with up to 80% of the jobs they create taken from other places.

Also that they are expensive, with estimates ranging from £23,000 to £50,000 per job created.

Having said that, if you are looking to expand your business (the zones will be most useful for businesses that have been going for two or three years, and are looking to expand and inhabit their first business premises), is there a benefit to doing so in a Enterprise Zone rather than elsewhere?

Probably yes. One of the main benefits that the zones will offer is a business rate discount worth up to £275,000, or enhanced capital allowances for plant and machinery where there is a strong focus on manufacturing, over a five year period. That coupled with the other advantages of infrastructure and support can make it attractive.

So where are these Zones? They are not all in areas needing regeneration, another criticism, but are areas with the most potential for growth and those which could attract inward investment from abroad. The government has announced the following areas will get an Enterprise Zone:

the Black Country;
the Tees Valley;
the West of England;
the North East;
Humber Estuary Renewable Energy Super Cluster;
Daresbury Science Campus in Warrington;
Newquay AeroHub in Cornwall;
The Solent Enterprise Zone at Daedalus Airfield in Gosport;
MIRA Technology Park in Hinckley, Leicestershire;
Rotherwas Enterprise Zone in Hereford;
Discovery Park in Sandwich, Kent, and Enterprise West Essex in Harlow;
Science Vale UK in Oxfordshire;
Northampton Waterside;
Alconbury Airfield, near Huntingdon in Cambridgeshire;
Great Yarmouth in Norfolk, and Lowestoft in Suffolk.

Interestingly, it is difficult to then get further detail on each and how to apply to be in one. These are being managed by each Local Enterprise Partnership (LEP), so the first step is to contact one of these. You don’t have to already be working or living in the area, if you are prepared to move your business there.

Resources that may help:

Map of the Local Enterprise Partnerships (LEP).

Contact details for the Local Enterprise Partnerships (LEP).


Will small businesses ever get a slice of government spending?

Government helping small businessA few days ago the office of the Prime Minister sent a letter to many small businesses and SME organisations explaining that a new online tool called Contracts Finder has been launched that will show all government tender opportunities.

At the same time he said they would eliminate the prequalification questionnaire (PQQ) for low value orders and standardise it so it was filled in just once for all other procurements.

Additionally there would be “Dragons Den” type surgeries where people with innovative products and services will be able to come and pitch to government – rather than waiting for the right tender to be issued.

All good news generally. For years the conditions set by procurements have excluded, or been unfairly weighed against smaller businesses applying for tenders. The cost of doing so is also proportionally higher for a small company than a large one.

Some people have commented that they are worried that eliminating the PQQ will create a “free for all” and that companies that stood no chance would waste their time bidding.

Well in an open market that can happen, but if in fact getting rid of the PQQ doesn’t change at all the size of company winning a tender, what was the point? There probably is still a culture in government procurement that only larger companies should win and just getting rid of prequalifying is not enough, attitudes must also change. I’ll wait and see on this one.

However, the Contracts Finder could be very good news indeed. There are some government tender sites out there (a couple charge for their use), but having one simple and easy to use central site for all tenders is a godsend. Much saving of time and hopefully it will make sure we don’t miss any relevant opportunities ever again.

Now on to the “Dragons Den” surgeries. They are not quite as the description implies, because you are not pitching for investment or funds, but for the chance to sell your innovative product or service.

The surgeries are going to be managed by Stephen Allott as a new Crown Commercial Representative (CCR) for SMEs. You will pitch to “a panel of senior procurement and operational professionals from central government and the wider public sector”.

I like this idea a lot, but the proof will be how many get taken up and what hoops they will have to jump through.

In the early days of Company Partners I approached a government figure to offer our business partner matching service to assist people who wanted to start a business. You would think that encouraging new start-ups by finding them a like minded partner to start up with was an obvious benefit to the economy.

The feedback was positive, but I would have to talk to the regional development agency, they in turn insisted I talk to a local Business Link and so it died. They also wanted me to trial it locally for 2 years and if it was successful they would put it out to tender.

Herein lays a problem. If at one of these surgeries, a young company puts forward an innovative idea for a service, will the government support them and place an order, or will there be endless jumping through hoops, or worse (in order of course to be fair and impartial) they put the service suggested up to open tender, effectively stealing the small company’s idea and giving it to someone else?

There is optimism for the general direction that the government is going on this, but let’s see if it actually produces a change.


Where have the business incubators gone?

Business Incubator

At one time business incubators seemed to be mentioned in the business section of every newspaper. Now they have a much lower profile and you might be forgiven for wondering what had became of them.

Since they tend to be focused on high growth, technology or knowledge-based industries, it’s not surprising that during the hay day of the Internet and emerging biotech industries, business incubators had a greater visibility – but they are still out there.

Now I’m a great fan of these centres. In one place you not only get subsidised rent for very well outfitted office space, but also access to real expertise and advice.

Naturally you have to check out just what you are getting. Some, I have to say, are better than others, but the best will provide outstanding support that will increase your chances of rapidly growing and making a success of your new venture.

So how do you know which is the best one and importantly which one is best for you?

First, consider where your business is to be based. Most business incubators (some are called Innovation Centres) have a regional focus. Then look for one that may specialise in your industry, they are more likely to be of specific help when looking for suitable experts or contacts.

Judge how they respond to you when you make contact and then meet up with them and see whether you could work together. How open are the support staff and how accessible is the industry expertise?

When we recently did a survey of business incubators and innovation centres, most were very helpful, but some ignored us completely and one was actually very arrogant. I know which I’d rather work with!

So is a business incubator for everyone? Well, no probably not. If you are opening a restaurant, a shop, or a courier company for instance, then they probably are not suitable. If however you have a knowledge based, high-tech, or creative industries business then they are ideal.

If you’d like to read more about business incubators and innovation centres, or are interested in finding one, have a look at the survey that we recently completed. There is a list of incubators there and we are adding to it all the time – Business Incubator & Innovation Centre review and listing.


On-line service to replace Business Link

Business LinkSo it is coming to pass. As I speculated back in March, the new government is to close Business Link.

Mark Prisk, the business and enterprise minister, has now said: “The regional Business Links have spent too much time signposting and not enough time actually advising,”

“We’re going to wind down the Regional Development Agencies, and as part of those, we’ll be winding down the regional Business Link contracts.”

The minister’s plan is to replace Business Link with a better state-funded on-line service, backed up with a call centre and more use of existing private business consultancies.

There was no time-table announced however and I wonder how they can do this in the short-term. For instance outsourcing giant Serco have only just taken over the running of the service in the south east in a three-year deal worth £80m and there will be contracts to supply the Business Link service through-out the country.

Whatever is implemented I hope it is done in a speedy fashion rather than dragged out. We will get to a position where Business Link services have to continue because the contracts are still in place, but no adviser wants to join them and the existing staff are demoralised because of the axe hanging overhead.

The planned on-line service replacement must be well thought out and effective. There is so much information on the web now days that just creating a government site that repeats this information will not do the job. It needs to be able to cover a vast range of issues in an accessible manner, catering from the inexperienced start-up, to established businesses looking for solvency advice.

Or should we be limiting the focus of such government advice centres. The original Business Link was set up to encourage new and very small businesses, but lately had targets set upon them that pushed their focus towards SMEs that had 5 – 250 employees.

There is an argument that an established business could better afford to engage consultancy advice from the private sector and that the free support (presumably on-line) should concentrate on start-ups and businesses with less than 5 employees.

I wait with baited breath to see the next set of announcements on timetable and focus areas for the new service. I just hope that like almost all government IT projects, the implementation of the on-line service doesn’t over cost and under deliver.