Mergers and acquisitions: the pits and peaks of corporate buyoutsPosted 12/21/2011 by Steven Perryman & filed under News.In the world of mergers and acquisitions (M&A), landing a sure thing is a managerial high-wire act. Here we profile some well-known failures and successesEgos, hopes, dreams, schemes and unimaginable amounts of money: these are the core ingredients of any high-profile buyout.Last month the corporate world witnessed what happens when those ingredients fail to blend, as the relationship between record label EMI and its recent purchaser Terra Firma unravelled in the full glare of media attention. It was exactly the sort of deterioration that shows how carefully calibrated a buyout must be for all parties involved to feel the benefit.Usually, the pattern runs something like this: Company A sizes up Company B in the same sector. Company B is somewhat smaller, but still pretty well off – and yet isn’t working quite as efficiently or profitably as it could be. Company A weighs in with an offer, lawyers talk about it for months on end, and eventually a merger plan is agreed.Company A pipes its own expertise into Company B, which promptly helps Company A to access new markets. Depending on how Company A feels about life after the merger, it will either keep Company B’s brand going, or impose the Company-A banner upon the purchased firm. Ker-ching.There are, however, all sorts of variations on this. And, as is customary when imparting information, here is the bad news first…PITSTerra Firma takes EMI (2007)Led by Guy Hands, the takeover of EMI was a controversy wrapped up in a culture clash. In 2004 and 2005, the label was reeling from the draining effects of online piracy, delayed handovers of new Coldplay and Gorillaz albums and the defection of Radiohead to their own online-distribution arm. Despite that, it had a back catalogue to die for, and the Guy Hands remedy was to maximise it through all available channels.However, lawsuits over the online distribution of songs by The Beatles and Pink Floyd sapped the label of vital momentum, and the general trend for falling album sales didn’t help matters much either.On top of that, music journalists questioned whether a private equity chief with no discernible fan credentials could possibly hope to steer a record label. Bit by bit, EMI’s debts piled up, and in February this year Citigroup – which had facilitated the Terra Firma deal with a £2.5bn loan – assumed full control.Daimler-Benz takes Chrysler (1998)European luxury-car company Daimler-Benz saw a spiritual twin in US manufacturer Chrysler, and snapped it up for the princely sum of $36bn. The plan? Draw in sales revenue from one of Detroit’s original Big Three motor makers and find access roads into the US for Daimler’s own classy products.Unfortunately, Daimler-Benz had made its approach at the very time that the tide turned in global auto sales. Asian manufacturers were in the ascendant, and US firms on the decline. Added to that, Daimler bosses proved reticent in allowing Chrysler to use some of its pristine components. The European purchaser had utterly failed in its market forecasting and cooperation, and in 2007 it offloaded Chrysler for $7.4bn.AT&T takes NCR (1990)Founded in 1884, the US-based National Cash Register Company (NCR) made its name building a large proportion of the country’s tills. Over time, it evolved into a full-service transactions enterprise, dealing in point-of-sale technology and hole-in-the-wall cash dispensers. As transactions and telecommunications converged, AT&T moved in for a piece of the action.Exploding with ideas about the different technology areas that NCR could be applied to, AT&T diversified the firm – which promptly began to haemmorhage funds.This ‘negative synergy’ was thought to have cost AT&T around $1.3bn. In 1995, AT&T announced that it would be repositioning its assets into three divisions – AT&T, Lucent and NCR – a tacit admission that the NCR buyout had not quite worked. Happily, in 1992 NCR had acquired the information-storage company Teradata, which went on to become a market leader in the field of data warehousing.PEAKSDisney takes Marvel Studios (2009)This acquisition is turning out to be a match made in cartoon heaven.While the companies are as similar as Daimler-Benz and Chrysler, they are different enough to make the marriage worthwhile. On one hand, the Empire of the Mouse has a glittering track record in cross-platform merchandising of the numerous characters it has created. On the other, Marvel is preparing an ambitious film slate with access to around 5,000 fictional personages.Disney’s $4bn cheque is already paying dividends: following the success of 2010’s Iron Man 2, this year will see the big-screen debuts of Marvel’s Captain America: The First Avenger and Norse god turned superhero, Thor. Plotlines from all these films will then be intertwined for the 2012 Marvel-heroes team-up epic, The Avengers. All told, a lot of box-office to look forward to. POW!Google takes Sprinks (2003)Sprinks (short for ‘sponsored links’) was set up by US media company Primedia to provide content-targeted advertising across its popular About.com website. Google paid an undisclosed, but reportedly very low, sum for Sprinks, and immediately began to transform it into a platform for its fast-growing advertising service AdWords.For Primedia, Google added a valuable touch of finesse to About.com’s advertising content. For Google, Sprinks gave AdWords an enormous new presence at a time when competition with Yahoo was hotting up considerably.Two years later, the deal was sweetened even further when About.com was acquired by the New York Times. The paper’s move enhanced About.com’s credibility and pepped up the profile of AdWords into the bargain.GlaxoWellcome takes SmithklineBeecham (2000)As you can no doubt glean from the names of the parties involved in this deal, they had already been created via corporate mergers – so this was really a case of four companies piling up to make the first pharmaceutical super-giant. The result, GlaxoSmithKline (GSK), began its life with an estimated valuation of $130bn.GSK emerged from a period of extensive consolidation in the pharmaceuticals industry, which had attained a global presence by the end of the millennium. Other companies to merge at the time were Hoechst and Rhone Poulenc, forming Aventis. GSK now stands as one of the three largest pharmaceutical companies in the world.Find out more about mergers and acquisitions at the official Competition Commission website.
Student view: ICAEW Women in Accountancy 2011Posted 12/14/2011 by Stuart Waterman & filed under News, Women in finance.AAT student Ceris Williams attended the ICAEW Women in Accountancy event at Chartered Accountants Hall in London on 21 November. Here she gives a glimpse of what she learned on the day.ICAEW’s Women in Accountancy 2011 event brought together 75 aspiring female members of the Association of Chartered Accountancy (ACA) from across the UK to explore routes into Chartered Accountancy.As an AAT student I went along to find out how to make the transition from AAT to ACA, and gain some valuable guidance when applying for a training contract – from the HR managers who review the applications, and from successful ACA members in practice.Employability skillsSo, what exactly are the key skills that employers look for when assessing a candidate’s suitability for a role? They include the following:CommunicationCommercial awarenessPlanning and organisingProblem solvingTeamworkingResilienceClient serviceIntegrityCoaching and developmentCareer focusFaced with what initially seemed to be a fairly daunting list of core requirements, the employability skills session used the ‘Discover, Develop, Apply’ methodology to help me identify the skills I have, and match these to the skills employers want.I’m going to concentrate here on how we went about assessing our abilities when it came to the communication aspect.DiscoverThe first step in the exercise was to discover the skills I already have. I was encouraged to think about the all different ways and situations in which I use the skill of communication. I realised that as an active member of the online AAT student community I engage with fellow students, tutors, MAATs, MIPs, Chartered and Certified Accountants as well as potential employers on a regular basis. This demonstrates that I am comfortable discussing accounting topics and that I am confident in putting my opinion across in the written word.DevelopHaving identified the way in which I currently use communication skills, I was encouraged to keep looking for new ways in which to develop my abilities in this area – a fellow delegate suggested a course in presentation skills, while another suggested report writing, or even blogging. You might say that writing this article shows how I’ve taken that suggestion on board!We were challenged to think of ways each of these core competencies could be demonstrated in different areas of our lives – be that through undertaking charity and voluntary work, as a member of a sports team or social committee or through other life experiences such as travel or work experience gained in other sectors.Having taken an inventory of my skills and explored some ways in which to develop them, the next step was to apply this knowledge at all stages of a job application, from the initial application process through to assessment centre and interview.ApplyWhen it comes to applying you skills, you need to remember that throughout the application process employers are looking to answer the following questions.Can you do the job?While this will largely be informed by the qualifications you hold, it is likely that if you’ve reached the assessment centre stage then many of the other candidates will also meet this criteria. To stand out from the crowd it’s important to demonstrate your ability to apply your learning to practical situations.Use the insights you gained about your skills in the “discovery” part of the exercise to give clear examples of how and when you have applied your skills and experience, and the results you achieved.Will you do the job?Employers look for candidates who not only have the technical skills required to do the job, but also exhibit the ambition and drive to excel within their role.Demonstrate your motivation by setting challenging but achievable career and learning goals. At interview, be prepared to outline the steps you have already taken towards reaching your career goals (being an AAT student is a great start) and the steps you plan to take in order to fulfil these objectives.A clear plan of how you will develop your skills shows commitment and an active desire to progress your career.Will you fit in here?Just as we all have different personalities, companies have different corporate cultures. It is important to be self-aware, but it’s also equally important to undertake thorough research of the company you’re applying to and to be clear about how you think you’ll fit into the organisation.The application process is an opportunity for the employer and candidate to discover the ways in which they can work together to develop mutually profitable ongoing relationships.Does AAT equip you for ACA?As the morning session on Employability Skills drew to a close I had the opportunity to speak with current ACA trainees over lunch. Naturally I was keen to gain insight from AAT students who had progressed to the ACA qualification. Emma, a trainee in her final year of the ACA qualification at a top 50 accounts firm told me:“The practical skills that I gained studying AAT mean that I am in demand with clients… I’m booked out on assignments for the foreseeable future!“Ceris Williams is a regular contributor to AAT’s Facebook page and the AAT Discussion Forums
How to find work experience and make the most of itPosted 12/08/2011 by Steven Perryman & filed under Career.Work experience. Two words that tend to make you misty-eyed for your final year at school. But, in an increasingly competitive job market, work experience is now more important than ever, whatever stage of your career you’re at.It can open doors, focus your ambition and be a vital opportunity to show what you can do. But how can you make sure you get the most out of working for free? Well, here’s 10 ways to start.Consider what you can affordWork experience is often not subsidised and means time out from paid work, studies or your family. Think about how long you can survive without an income, if necessary, and how much time you have to spare.Do your researchExplore the sector you want a career in and investigate companies you are interested in working for. Search their websites for details of work experience programmes, but don’t be put off if it’s not obvious. Many companies offer work experience, but you may have to send them a letter to find out.Compose a strong applicationDemand for work experience is high, so apply at least three months in advance of when you would like the placement. Whether it’s a response to an advertised position or a speculative enquiry, write a well-researched application tailored to the specific company, outlining why you want to work there and what you can offer them. Be prepared for some rejections, but don’t get disheartened – perseverance will pay off.Set firm goalsDecide what you want to get out of the placement – especially if you are working for free. Do a ‘skills audit’ to find out which skills you need to brush up on. Ask if you will have a mentor with whom you can discuss these objectives, so you can work towards achieving them.Act professionallyMake sure you know who you are reporting to, arrive on time everyday and dress appropriately – check in advance what you need to wear. Be friendly and polite to everyone you meet and socialise with your colleagues if you get the chance.Be enthusiastic and use your initiativeEvery job has mundane aspects, but complete everything that is asked of you with enthusiasm, and seize every opportunity. If you are left to your own devices, think about how you could help others in the office. If you make yourself indispensable, you will increase your chances of being asked back.Keep a diaryUse this to record all the tasks you undertake, the hard and soft skills you use and everything you learn. At the end of the placement, ask your supervisor to read your diary and give you feedback. This will give you an insight into how to improve and provide great content for your CV.Make contactsAsk people how they got their job, whether they enjoy it and what work experience they did. It’s important that you learn about the job and get to know the people you are working with, as they can be useful for references.Ask questions and contribute ideasTake in and adapt to everything, but don’t be afraid to ask questions – it’s better to ask than to guess and get it wrong. And if you have a relevant idea, feel free to share it, where appropriate – your colleagues will appreciate a new perspective.Stay in touchIf you enjoyed the work, enquire about further opportunities and a reference. However the experience turns out, learn from it.Do you have work experience tips you’d like to share? Let us know by leaving a comment below.
Excel apps for accountantsPosted 12/07/2011 by Steven Perryman & filed under Run your business.In an increasingly fast-paced business environment, we’re always looking for ways to do more in less time. Here we show you some apps for editing Excel spreadsheets on the go.Handling Excel on a mobile device isn’t a simple task. Excel is a comprehensive piece of software with an array of advanced options. Want true compatibility? Only Microsoft’s new Windows Phone 7 software runs a native mobile version of Excel as part of its ‘Office hub’The lack of native compatibility means that iPhone/iPad, Android and Blackberry users need to try third-party solutions such as Documents To Go and Quickoffice in search of the most effective Excel-compatible experience. What do we mean by ‘effective’? Simply put, a mobile spreadsheet application is a companion to Excel, not a replacement for it. A good app will strip back the full functionality of Excel without sacrificing too much core usability.Ideally, an effective app will let you create new spreadsheets, not just view them. You’ll be able to edit and update these; create new columns and rows; copy and paste data between cells; sort, freeze and format; and perform basic calculations. You’ll want to easily import and export Excel files (in both .XLS and .XLSX formats) without ruining the workbook’s formatting.Is there a smartphone app that does all this? Here are three apps for mobile devices. Apps for the iPhone will also work on the iPod Touch and big-screen iPad, while apps built for Android can be used on tablet PCs that run the same software, such as Samsung’s Galaxy Tab.Microsoft Excel Mobile, £FREE Available for: Windows Phone 7 onlyMicrosoft’s Windows Phone 7 OS now delivers a far better mobile Windows experience. For business users, Office Mobile is the real draw. Alongside Outlook Mobile, Word, PowerPoint and OneNote, the dedicated ‘Office’ hub features a great version of Excel that’s fully compatible with Office 2010.Excel Mobile doesn’t support all the features in the desktop software. But there are 114 functions, the ability to insert charts, apply filters, sort data, format cells and freeze panes.DataViz Documents To Go Premium, £9.99 Available for: iPhone, Android, BlackBerry, Palm, WindowsDocuments To Go first made an appearance on old Palm PDAs for viewing Office documents.The latest version is available for almost every device and the Sheet To Go component effortlessly opens Excel (.XLS and .XLSX) files while retaining the original formatting. You can create and edit spreadsheets, export to Excel and store files on services such as Google Docs, Box.net, Dropbox, iDisk and SugarSync.But large spreadsheets can crash the application, while imported documents will open as ‘read only’ files if they have functions that Documents To Go doesn’t support. There’s also no chart creation functionality, but you can’t get everything in a mobile version.Quickoffice Connect Mobile Suite, £5.99 Available for: iPhone, Android, BlackBerry, Palm, Windows, SymbianThe Quickoffice Connect Mobile Suite trumps the cheaper Quickoffice Mobile Suite with support for cloud-based document-sharing services. If you store your Excel spreadsheets in a Dropbox folder on your PC, they’re automatically available (and editable) online. Both .XLS and .XLSX formats are supported but Quickoffice works best with simple spreadsheets and basic number-crunching.
In pursuit of public interest – a step too far?Posted 10/09/2011 by Tania Hayes & filed under News.You cannot fail to have noticed the phone hacking saga which has dominated the news agenda in all papers, with the possible exception of last week’s London riots.Consulting our trusty friend Google, I happened upon the BBC College of Journalism website, where I pondered the ethical values promoted – truth and accuracy; impartiality; independence; public interest; accountability. So, are the not so innocent guilty of breaching these values?To what extent did the ends achieved by their publication of the hot topic stories justify the means used to source their information?To this end, we need to reflect on the distinction between the legitimate public interest and what is of interest to the public. Because this is at the crux of how News of the World journalists appear to have justified the means used to gather stories in their own minds, if not in the eyes of us, Joe Public.The prolific sales of News of the World and its tag line of ‘the world’s greatest newspaper’ suggest that we as the public did have an interest in John Leslie snorting cocaine in his living room, the soap opera-esque relationship of Jude Law and Sienna Miller, Wayne Rooney’s use of prostitutes whilst his wife was pregnant and Sarah Ferguson shamelessly selling access to her former husband, the Duke of York, in a carefully orchestrated meeting with the ‘Fake Sheik’.These, however, are arguably less in the public interest than the example given by the BBC of a legitimate public interest topic – financial services and risk management within the sector during the period of boom we experienced before the world came crashing down in 2008.With our 2011 eyes, the topic seems all the more interesting and we can clearly identify the public interest justification for reporting on economic, political and social grounds. But the issue faced by journalists at the time was that it didn’t sell papers – the public is far more interested in reading about the topics detailed above than most public interest offerings journalists should be reporting on.So the key question is, is it in the public interest to feed the public desire for salacious gossip and invasion into the private lives of celebrities? This is a question we saw not so long ago, with Ryan Giggs’ not so subtle attempts to gag his lover from selling her story to, ironically, the News of the World’s sister paper, The Sun.The High Court determined that his right to privacy superseded the public interest argument put forward by The Sun. John Hemming MP decided otherwise, favouring use of parliamentary privilege to breach the gagging order and satisfy the interest of the public to know which footballer was at the centre of the moral and, arguably, private scandal.We were fine with this at the time – celebrities are role models in the public eye, and therefore the public has the right to know what they get up to. But the revelations that Millie Dowler’s phone had been hacked, as had numerous other members of Joe Public who didn’t live their lives in the public eye or benefit from the interest of the public in day to day affairs, left a bitter taste in our mouths and really crystallised the public interest issue in our minds.News International management have been hauled in front of a Parliamentary Select Committee to explain themselves and their involvement in the phone-hacking allegations. Would John Hemming MP been minded to have taken the approach he determined appropriate a few weeks ago, had there been any suggestion that Ryan Giggs’ phone had been hacked? We will never know.The endemic nature of this scandal and its repercussions throughout the legal, and political world has given us all the opportunity to have a long hard think about the public interest, with the overwhelming majority feeling that the public interest has been flagrantly disregarded despite being the overwhelming justification for the actions taken at the time.Our only hope lies with ‘accountability’, which is currently being tested through both legal and political inquiries. Given the legitimate public interest in this scandal, we can hope that adherence to the ethical principles detailed above by journalists going forward, will result in a return to public interest reporting, and a shift away from feeding the public need for gossip at all costs.
Head into the cloudPosted 09/09/2011 by Steven Perryman & filed under Run your business.Every cloud has a silver lining. And the current cloud looming over the UK business landscape potentially has one of the biggest silver linings of them all.Cloud computing is a buzz-phrase that has been exciting tech-heads and IT departments for years, but now it is going mainstream with numerous businesses – from small firms to large corporates – latching on to its potential benefits.But how does it work; what are the key attractions of using it; and are there any potential pitfalls that users need to be aware of?In its most basic terms, cloud computing is simply a new way of delivering IT services. Rather than splashing the cash to build your own IT infrastructure to host databases or software, and then employing a team of IT specialists to look after this infrastructure, a third-party provider, such as IBM, hosts these databases and software for you in a server farm.As useful as such services are, there is much more to the cloud than creating simple master documents. The cloud allows businesses to create an online space to suit their own needs.You can use a public cloud that anyone else can access or you can have a private cloud used by a single organisation. Alternatively, multiple companies can band together and run a shared private cloud.Whichever cloud option you plump for, one of the key advantages is the time and cost savings that it offers. The cost of cloud computing varies wildly depending on requirements.A company’s entry-level Development and Test Cloud costs from as little as 15 cents an hour and offers IT savings of up to 50%. In addition to the financial benefits, it’s also scalable, allowing you to manage peaks and troughs in activity more effectively.It sounds great – but there are a few issues that cloud users need to be aware of, particularly around the areas of legality and security. If you send your data into the cloud, you don’t know who is looking at it.You can encrypt data on your laptop and then send it up into the cloud, and then you can control who can see the data so it is very secure. However, a lot of cloud computing data is processed in the cloud, so there is a security risk.Many believe that such security concerns are mere mythology.An average small business is probably working with a server in a stationery cupboard, backing up every night. But they’re probably not checking if the back-up is successful and they probably don’t know how effective their firewall really is.When you’re dealing with a major cloud provider, you are dealing with a set-up in which servers are in dedicated units and the security is like Fort Knox. You can be 99.9% certain, if not 100% certain, that their security, back-up procedures and virus checking is going to be better than what you’re operating in your own office.The one area in which he admits that there remains a lack of clarity is the legal framework within which some businesses must operate. Under the terms of the Data Protection Act (DPA), companies that hold an individual’s personal details must notify the Information Commissioner’s Office that they are processing information and tell them how this information is held.A key legal requirement of the DPA is that personal data is held within the European Economic Area (EEA) or else in a country deemed to have an adequate level of data protection (see box). So if your data is in a cloud hosted in an EEA member country, the US or any one of the other approved countries, you should be fine. But if your data centre provider has a facility in, say, Mexico or China, then you will be in breach of the DPA if your data is held there.Some providers may offer assurances that information will be saved in countries that comply with legislation, but such promises cannot always be met.This will become less of a problem as third-party service providers such as IBM build networks of data centres throughout the world so that they can offer customers a truly local service.Despite its emergence, cloud computing is still a very new concept to many businesses. But not for much longer. Apple is launching itself into the marketplace with its iCloud service, so the stigma is about to dissipate.With consumers set to embrace this seemingly new concept, it’s only a matter of time before businesses follow suit.
Accounting with a twistPosted 09/07/2011 by Steven Perryman & filed under Run your business.AAT Comment meets two highly successful members in practice (MIP)Sophie Hughes MAAT always wanted to be an accountant.After completing her A-levels, she heard about AAT and how it offered a fast track non-graduate route into chartered accountancy. ‘I knew university wasn’t the right option for me, ‘ she says. ‘AAT seemed like the perfect first step into my chosen career and a quicker route to my end goal.’Meanwhile, Lucy Cohen MAAT took a gap year after her A-levels and worked as a runner for television and film. Quickly realising that it wasn’t all it was cracked up to be, she started thinking seriously about accountancy and came across AAT. After consideration, Lucy thought it was the best all round qualification out there and immediately knew she’d made the right decision as soon as the course started.Lucy and Sophie bumped into each other by chance at the very last AAT exam revision class in Cardiff. Previously old school friends, they went for a glass of wine and in December 2006, Mazuma was formed.Mazuma is a national service specialising in providing monthly bookkeeping and accountancy to sole traders, the self employed and owners managing limited companies through out the UK.Lucy and Sophie have expanded quickly and now have an array of branches throughout the UK and they’ve recently moved into a new head office in Bridgend, West Cardiff to allow room for even more expansion. They currently have 25 staff and 1,200 clients throughout the UK. They have also just opened their first office internationally, in Salt Lake City, US.‘We’re continually evolving and growing as a business,’ Lucy says. ‘We spotted a gap in the marketplace and took advantage. We offer a service like no other – easy to understand, no fuss and low cost. Our customers appreciate this approach and we go to great lengths to always make sure the customer comes first.’They have won numerous awards such as HSBC Start Up Stars, UK Winner, 2010, HSBC Start Up Stars, Wales Regional winner, 2010, National Chamber of Commerce: Winners of Wales Region, Excellence in Customer Service for two years running, South Wales Business Award: Finalists in ‘Business Service Business of the Year’ Award – August 2009 and the list goes on.The awards have been won in recognition of their ‘Purpleforce Package’ – which allows any customer to add in a few details online, the customer immediately gets a quote and then a welcome pack is sent out with 12 purple freepost envelopes.The customer puts their accountants, invoices, sales figures into one of the purple envelopes, pops it in the post and then an email is sent to the customer saying that the envelope has been received and within five working days, the accounts are sent back – done and dusted.Lucy and Sophie’s success continues to flourish. ‘Other budding entrepreneurs out there should not be put off by the continued economic downturn,’ Lucy confirms. ‘When we first started out, not many people believed in us or our business proposition. However, we knew we had a good idea and we preserved and look where we’ve ended up.’Sophie adds: ‘University isn’t always the best option, we wouldn’t be where we are today if we hadn’t studied with AAT. We’ve been able to climb the career ladder faster and we’ve got transferable skills which we’ve used in our business from day one.’More about Mazuma can be found on its official website.
Why it pays to think greenPosted 09/02/2011 by Tom Kelman & filed under AAT news, News.Planning for the future is not just about ensuring financial stability – a business can’t grow when the resources it depends on are diminishing.As professional accountants, we have a key role to play in helping organisations ensure their business is sustainable. We can do this by integrating key performance indicators into our standard systems and processes, and use our accounting skills to collate and analyse data to monitor, manage and maintain sustainable development.This is just one of many reasons why AAT is involved in the Prince’s Accounting for Sustainability Project. Set up in 2004 by HRH Prince of Wales, the project aims to develop practical guidance and tools to embed sustainability into an organisation’s decision-making and reporting processes.AAT is representing the voice of small business in developing this reporting process to ensure it is practical for all organisations regardless of size or turnover. In addition, we see our role as educating our membership and providing guidance to the wider SME community.We believe this process is so crucial that the AAT is fully committed to embedding sustainable development and integrated reporting into the qualification and educational process.As an organisation, AAT is also playing its own part in the journey towards a sustainable business model. Last year, AAT’s Council set up a working group to research the best way to achieve this and sustainable development is now a key part of our business plan.Over the last few years, more and more of our services have been moved online meaning a reduction in printing and postage but also greater efficiencies for the membership. We also reduced our carbon footprint in late 2007 by moving from premises split over eight floors to one and a half floors decreasing our square footage by over 3,000ft.Sustainable development is really about making the best use of what resources we have available – rather than wasting them now at the expense of future growth. We fully believe sustainable development should be at the heart of every organisation in order to secure its future.
Early stage accountancy advice 2Posted 08/29/2011 by Henry Cooper FMAAT & filed under Run your business.In the second installment of our early stage accountancy advice article AAT Vice President, Henry Cooper FMAAT offers advice on investing your time to build up your knowledgeMy second tip for budding entrepreneurs is to invest your time in building up your accountancy knowledge.Here’s why:How can you succeed if you don’t know how much your business is worth? Or you don’t know the difference basic terms such as cash flow and profitHow can you communicate effectively with not only your accountant but also your investors, suppliers and employees if you don’t understand the basicGaining accountancy knowledge and know how will allow you to make better and more strategic business decisionBusinesses that do their own bookkeeping and do it well can use their accountants for a higher level of expertiseYou can monitor your competitors by having a firm understanding of their annual reportsI often think this should be obvious. Surprisingly, it isn’t. Most entrepreneurs either don’t invest time to understand the basics or lack interest in this area of the business. However, there is no excuse nowadays to turn a blind eye – there is such an array of resources available to the SME market and often these resources are free.In the first instance Business Link should always be the first port of call. Not only is this website a hub of knowledge but a place in which links directly to HMRC and businesses can take advantage of doing their VAT return online through the site.Companies House, will provide a key tool for company directors as will the actual HMRC website. All these websites will keep you up to date on changes to tax legislation and accountancy standards.My third tip is to think wisely about your business entityThis will take a lot of thought and again it’s worth seeking professional advice and guidance in order to weigh all the options. Also, take note that whatever legal business structure you decide to be, you have to register with HMRC. Things you must understand before you make a decision:Understand the differences between the various business structures with strong emphasis on sole-trader, partnership and Limited Company/ Limited Liability PartnershipSole-trader and PartnershipThe process of setting up your business under the entity of sole-trader or partnership is relatively straightforward. All you are required to do is register with HMRC. You don’t have to publish your accounts publically and you only pay tax on the profits you make.However, the disadvantage is that you have little security and no unlimited liability. Therefore if you acquire debts that can’t be paid then your creditors are in a position to seize your personal assets.Limited CompanyRegistering your business under this title means that you will have a lot more regulations to abide too. Not only do you have to register through companies house and let HMRC know how many employees you have, you will also have to pay national insurance and income tax.The advantages are that you benefit from limited liability and your personal assets are more protected. In more corporate environments this type of structure is seen as more reputable. Legally you are also required to publish a yearly basic financial report, in which this data is available for anyone to purchase.It’s wise to consider:The pros and cons for each business structure and to think wisely about your business needs now and in the foreseeable futureBe aware that depending on what structure your business becomes this will have consequences on what records and accounts you have to keepWhile you can change your business structure, it’s important to be aware that being a sole trader/partnership is taxed differently to those businesses that operate as a limited company and therefore if you change from one business structure to another then you should wait until the end of the tax yearDon’t miss my final installment of tips on 5 September when I will look at how to implement an accounting system which is right for your business requirements.
Labour of lovePosted 08/23/2011 by Stuart Waterman & filed under Run your business.In the economic downturn, consumers inevitably cut down on spending and find ways to tighten their belts.This often leads to an up-surge in consumers finding new ways to be resourceful. For example, there was a noticeable trend in people taking up ‘crafts’ during the peak of the UK recession.John Lewis reported a 57% increase in sales of sewing machines in 2009. Further to that, sales of buttons went up by 18%, silk prints up by 75% and basic haberdashery by a further 11%.With the ‘make-do-and-mend’ culture continuing to thrive, it’s hardly a surprise that many start-ups are turning their crafting hobbies into businesses. More often than not applying business knowledge and financial awareness to the business ‘dream’ can be frustrating for budding creatives attempting to start up a successful business.The harsh reality is that three in five start-up businesses fail within a year. Many creative businesses therefore need to have a firm understanding of basic business skills, finance, book keeping and business management in order to succeed in a very competitive business arena.Starting a creative business will always be hard work. Budding creatives can put themselves at an advantage by having a strong business head and a firm understanding of how to keep their finances in order, especially when it comes to keeping proper accounting records that will satisfy HMRC.Of course, a creative business cannot succeed on creative flair alone – a strong business model needs to be in place to ensure survival and growth.It doesn’t take much time to draw this up – when you know how – and it will be time well spent and something that can be built on in years to come.