The coronavirus pandemic has changed the world in very many ways. The way people live, the way people interact and of course – the way people do business. Businesses around the world are having to re-think the way they operate, make adjustments to their models and look carefully at their staffing structures.

As part of this process, it’s possible that some businesses will be considering staff redundancies. As companies are forced to make tough decisions in order to keep their businesses viable, redundancy may be a way to maintain the health of the business.

The world however is a very different place now, compared to six months ago. The unprecedented nature of the coronavirus pandemic means that the government has stepped in to support companies with a range of benefits including the Coronavirus Job Retention Scheme – supporting businesses up and down the country and placing millions on furlough leave.

But as this scheme is gradually wound down by the government, it’s important that businesses considering redundancy procedures are equipped with the very latest information about how the to implement this process properly, particularly where furloughed staff might be involved.

What is the impact of the Coronavirus Job Retention Scheme for businesses considering redundancy procedures?

The UK Government’s Coronavirus Job Retention Scheme was created to help businesses deal with the economic impact of the Covid-19 pandemic. By placing employees on a temporary leave of absence – otherwise known as a ‘furlough’ leave – businesses could claim 80% of staff wages directly from the government, up to a cap of £2,500 per month.

A flexible phase of the scheme is currently in place up to October, allowing employers to bring staff back to work on a part-furloughed, part-employed basis. From 31 October however, the scheme will be stopped and employers will no longer be able to claim this financial support from the government.

In this changing economic picture, some businesses may be considering staff redundancies. This is never an easy decision for any business owner but it’s an important one that should be handled with dignity and respect for all involved. It’s also key to roll out this process in accordance with government rules around redundancy, with special consideration to staff that have been furloughed.

The fundamental rules around redundancy remain as they always have been. But while the furlough scheme is still operational and many staff are still at home, there are some extra pointers that businesses will need to consider if these employees are at risk of redundancy. These include:

• The logistics of running a redundancy process remotely. Furloughed staff will not be working or sitting in an office and it’s important that businesses manage the practicalities of the situation.
• Redundancy must remain a fair process, with pooling and selection criteria given careful consideration. It’s important not to discriminate against staff who have been placed on furlough and put in place a selection process that is based on clear and fair criteria.
• Staff who are being made redundant are likely to be entitled to a full salary payment while in their notice periods, regardless of whether they have been furloughed or not. Their redundancy payments must also be based on their full pay, rather than their furlough pay.
• Businesses should carefully consider the legalities of making staff redundant and ensure that any dismissal is not an ‘unfair dismissal’. This means considering other viable alternatives to redundancy, such as keeping the member of staff on furlough.

When to consider redundancies

As the furlough scheme continues to change and evolve, many businesses are considering their medium to long term health – and looking at redundancy as a possible option to keep the business afloat.

In these situations, it’s important that the redundancy process is a fair process, but at the current time it can be tricky to determine whether a genuine redundancy situation has come up – given the unusual nature of the furlough scheme.

It’s important to seek legal advice about making staff redundant while the furlough scheme is still active, in order to ensure that employment law is adhered to. At the moment all the usual regulations around fairness of any redundancy process are still in place, as the government support is still on the table.

As the 31 October deadline begins to loom, and the furlough scheme is withdrawn, more information is expected from the Government to help businesses make decisions about redundancy. In some cases, redundancy will be a business necessity.

Consultation with staff

It’s very important that businesses stick to rules around formal consultations with staff affected by potential redundancy. Employment law stipulates that a fair consultation should be carried out, and it’s important that businesses recognise this whether or not their staff are on furlough.

The logistics of running a staff consultation remotely should be properly thought out. Consultations with staff – whether collective or individual – may need to take place via a video conference or in writing. Employers should make time in the consultation process to handle these practical issues.

Employees also have the right to be accompanied to any redundancy meetings – this includes those taking place remotely. Videos calls or telephone calls could be a good option in these instances.

It may be necessary for the employer to engage with a Trade Union or staff representative group, if 20 or more redundancies are being considered within a 90 day time period. This can be tricky given the nature of the current situation, and employers should consider how to engage in a full and proper consultation while social distancing measures are still in place.

The furlough scheme is due to end on 31 October and employers should consider the impact this may have on redundancy consultation timeframes. Businesses should put adequate timings in place to ensure that full consultation can take place in a way that works around this deadline.

How to select roles for redundancy

It’s important that the redundancy process is fair and transparent. A list of selection criteria for roles at risk of redundancy should be drawn up, based on an objective list of considerations. These criteria must not be discriminatory in any way and full staff consultation should take place before they are confirmed.

For staff who have been furloughed, the same employment law around redundancy will apply, including rights around unfair dismissal and discrimination. Businesses should not automatically earmark furloughed roles for redundancy, for many reasons. These include:

• The initial reasons for which the furloughed staff were selected for furlough. These would have to be fair in those circumstances to remain a fair basis of the decision to make the roles redundant.
• Some staff may have been placed on furlough because they are shielding or have caring responsibility. Making these staff redundant could constitute as discrimination based on a variety of reasons. They should not be at increased risk of redundancy purely because they have been furloughed.
• Employers should consider whether to wait until the furlough scheme has ceased, before implementing any redundancies. The current situation is unprecedented, and there remains a grey area around making furloughed staff redundant, and the potential of an unfair dismissal claim.

Redundancy payments

When it comes to pay-outs, an employee’s rights should not be affected by their furlough status. All staff made redundant while furloughed will be eligible for a statutory redundancy payment, if they have two years or more continuous service with the business. These payments should be calculated based on the full salary of the individual, prior to the period of furlough. Any additional contractual payment should be calculated based on the terms and conditions of the contract, before the period of furlough.

Notice periods for staff made redundant while on furlough should also be enacted in accordance with their employment contracts. Pay during this period is most likely to be due at the rate of the employee’s pre-furlough salary, although there may be some legal discrepancies around this regarding statutory versus contractual notice pay.

For employers making a furloughed staff member redundant, there are certain costs that they will not be able to re-claim. These include:

• Payments associated with statutory redundancy
• Payments associated with contractual redundancy
• Payments associated with unused annual leave
• Extra compensation payments linked to the termination of employment

Employers may be able to reclaim certain costs:

• Costs associated with notice pay for staff carrying out notice periods while on furlough
• Costs associated with annual leave taken by the staff member while in a notice period

Both the above items can only be claimed for up to the relevant monthly cap set out in the furlough scheme.

Is the Covid crisis harming your business

You are not alone, the unprecedented damage due to the large scale forced economic shutdown has caused, and continues to cause, businesses of all sizes threats to their long term viability.

The friendly and helpful team at An Accounting Gem can help you navigate through this worrying time and towards the brighter future we all hope is not too far away.

Please call us on 01473 744 700 or send us an email at contactus@aag-accountants.co.uk and we will get back in touch with you ASAP.

Following a nationwide lockdown designed to curb the spread of coronavirus, the government announced on 10 May 2020 that the country would begin reopening on a phased basis. At the time of writing, we are currently in phase three, meaning that the majority of businesses are now looking at how to get their workplaces in order, so as to be able to return to work.

Before you can welcome employees back on-site, you are legally required, as an employer, to fully assess the risk to employees and customers of returning to the workplace, and then put steps in place to ensure that this is safely managed.

The government has published fourteen guides on working safely during coronavirus that focus on a variety of different workplace environments. These are worth looking at before doing anything else, as different workplaces will require different safety guidelines.

What Is A COVID Secure Workplace?

The health and safety obligations of employers in relation to COVID-19 are the same as they have always been, coming under a range of workplace legislation including:

• Health and Safety at Work Act 1974;
• The Management of Health and Safety at Work Regulations 1999;
• The Workplace (Health, Safety and Welfare) Regulations 1992;
• The Personal Protective Equipment at Work Regulations 1992; and
• The Control of Substance Hazardous to Health Regulations 2002

With COVID-19 still an issue, employers are required to take more targeted and severe steps to ensure the health and safety of employees, customers, and site visitors.

Steps To A COVID-Secure Workplace

1. Employers must carry out a full COVID-19 risk assessment, in line with current HSE Guidance, and then share the results of this assessment both internally and on their website.
2. Employers should create new, in-depth, cleaning, handwashing and hygiene procedures, create visible guidance for employees to follow, and support employees in increased cleaning and hygiene routines. This would include having more handwashing stations, hand sanitisers available at entry and exit points and regular cleaning of high-contact areas such as door handles.
3. Employers should support employees to work from home, including providing them with the equipment and software required for remote working, and providing them with physical and mental wellbeing support. At the time of writing the government is now encouraging people to go back to work, however it remains the case that continued support is necessary for those who must continue to work from home.
4. Employers should ensure that workplaces are set up for social distancing, redesigning areas where necessary, creating one-way traffic systems and so on.
5. Where it is not possible to have social distancing, employers need to manage transmission risk with the use of screens, having employees sit side-by-side instead of face-on, use of masks, or changing hours and appointments so that there are less people working at once.

How To Do A COVID-19 Risk Assessment

Whilst the COVID-19 pandemic is an unusual and unprecedented situation, the risk assessments you need to conduct are basically the same as any other health and safety risk assessment.

During a COVID risk assessment you will:

• Identify any situations that put people at risk of transmission
• Identify the employees that are at risk, and the likelihood of exposure
• Control the risk or remove the activity altogether

One of the first steps every employer should take, in line with the government’s own guidance, is facilitating employees working from home, where possible.

Questions To Ask

• Who can work from home?
• Who needs to be in the workplace, and what is the minimum number of staff members required on site to run the workplace?
• How do employees get to work? How can I reduce the risk to staff on their commute?
• What jobs and tasks could be adapted to lessen the risk of transmission?
• What, if any, PPE should I be providing?
• How can I communicate new hygiene procedures, and ensure that they are followed?
• How can we ensure that cleaning routines are completed regularly?
• How secure is the building? How can I redesign toilets, stairways, hallways and lifts for safety?

Sharing The Results Of Your COVID Risk Assessment

After your risk assessment is complete, it is necessary for employers to share the results with their entire workforce. It is a legal requirement for any business with more than 50 employees to publish the results of their risk assessment on their website, but all businesses are encouraged to do so.

Publishing your results not only makes your employees feel more secure, but also helps customers and other companies to feel good about the business and how you take care of your staff.

To communicate your findings directly to staff, send emails or have meetings and site inductions for all those returning to work. Make sure that they know where they can go to refer to the new health and safety guidelines and be proactive in following up with any staff that have not yet been in touch regarding their understanding of the guidelines.

What If Staff Members Don’t Want To Come Back?

Many employers have found that staff members are unhappy at the prospect of returning to work whilst coronavirus is still active. In this case, employees may cite Section 44 of the Employment Rights Act 1996, which states that if an employee has a reasonable belief of ‘serious or imminent danger’ to their health, they can refuse to work.

As an employer, it is your duty to provide a safe and secure work environment for employees. Coronavirus classifies as a danger to health, and is thus a good enough reason for staff to refuse to return, if you have not put enough procedures in place to keep them safe.

To make sure that you have done enough, and to reiterate to employees that you are focused on their health and safety, and dedicated to providing a secure working environment, you must perform your coronavirus-specific risk assessment first. After this you should communicate the findings and steps you have taken to secure the workplace, before asking employees to return.

We Can Help

An Accounting Gem is on hand to provide your businesses with the help and advice it needs to facilitate a return to the workplace. We can help you to apply for any grants and funding you may be entitled to, as well as working out what is necessary to secure the working environment, including steps like switching to flexible furloughing.

To find out more, get in touch on 01473 744 700 or email us at contactus@aag-accountants.co.uk

No-one quite prepares any business owner prior to the launching of their company for the baptism of fire you face in the initial fight for revenues, in keeping those early customers happy, and in juggling all of your new-found responsibilities. It’s a steep learning curve.

But this learning curve turns you from being an expert in your chosen field to being an expert in running a business in your chosen field. The importance of moving from the first step to the second step cannot be overstated.

One of the more unwelcome bonuses of opening a business for many company owners is the responsibility to keep accurate financial records. Financial recordkeeping is not only required so that you can submit accurate tax returns when they’re due – financial recordkeeping also provides you with the insights you need on how well your business is doing and with the information you need to make better decisions.

It’s almost always better for a business owner to outsource their bookkeeping and accounting rather than manage the responsibility themselves. Of course, we have a vested interest in promoting that belief so we wanted to share with you the five most significant ways that an accounting firm adds value to your business.

In this article, we’ll cover how An Accounting Gem:

• frees up more of your time,
• normally more than covers their cost by making sure every allowable expense is claimed,
• helps you see the real meaning in the numbers,
• can open doors when it’s time to expand, and
• has helped other clients through business highs and lows and how they help you do the same.

An Accounting Gem frees up more of your time

For all our clients, we strongly encourage the use of online bookkeeping platforms – in our mind, they are one of the most useful business tools to have been created since widespread adoption of the Internet. If you can, spend 5-10 minutes a day on which platform you are using issuing invoices you’re issuing to your customers, inputting invoices issued to you, reconciling with your bank account, and keeping your records as a whole in good order.

While online bookkeeping platforms are easy to use, we appreciate that many of our clients would prefer someone to do their bookkeeping for them. If that’s you, please let us know and we can arrange a personal, part-time bookkeeper for you.

Calculating VAT, PAYE, corporation tax, and your own personal taxation is time-consuming and complicated. An Accounting Gem produces account for Companies House and prepares tax returns to HMRC on your behalf when you’re a client of ours.

By outsourcing your bookkeeping and/or accounting to An Accounting Gem, you will save yourself a significant amount of time and negative stress. This is time you should be using to find new customers, build your company infrastructure, improve your operating processes, recruit the new members of staff you need, and more.

Running a business always involves stress – negative stress is unproductive, it doesn’t make you money, and it doesn’t make yours a better business. If you’re going to work with stress, it’s better that stress is positive – use the emotion instead to make money and to make your company more efficient and smoother running.

But accountants cost money – money you could keep in the business and perhaps even pay yourself with. But that’s not the full picture.

An Accounting Gem makes sure that every allowable expense is claimed

An accountant makes sure that, on your VAT, PAYE, corporation tax, and your own personal tax, that every single allowable expense is claimed for.

When you switch to working with An Accounting Gem instead of doing your own financial recordkeeping, you will likely be genuinely surprised at the level of reductions that they will discover and claim for in your VAT, corporation tax, and personal tax liabilities.

Your accountant forensically examines your financial records not just at the end of the year but when your financial year is in progress too. Each claimable expenses will be marked as such and each claimable expense means that you and/or your company pay less tax.

Even going through the smallest invoices you’ve received from your suppliers with a fine toothcomb can save £100s a year on VAT. We make sure that your personal income is split into the most efficient mix of salary and dividends possible to bring down the amount of tax you pay.

Once a business passes £100,000 a year turnover, company owners who keep their own financial records and manage their own tax affairs tend to forget to claim (or don’t realise they can claim) against certain expenses.

For most accountants, including An Accounting Gem, our aim is to make sure that the fees you spend with us on a monthly basis are lower than the amount of money we save you in tax by forensically analysing your records and making sure that we claim for everything.

An Accounting Gem is there to help you make sense of the numbers

With your financial recordkeeping very well managed and the amount you’re paying in tax reduced, what other benefits does an accountant offer which adds value to your business?

It’s often difficult to spot trends in a business. Your turnover may be going up but are you managing to maintain your level of profitability? If not, is that because your cost per sale is going up (the amount you spend on sales and marketing to find a new customer) or because your unit cost is going up (the amount you pay to fulfil an order).

Your accountant can match up what occasionally may appear to be unrelated sets of statistics and form a story from them. They’re able to produce monthly or quarterly management accounts identifying areas in which business performance has improved and areas in which business performance has deteriorated.

An Accounting Gem is a valuable ally when it’s time to grow

This increased knowledge of your own business’s performance, knowledge which your accountant also has, is valuable when you are seeking advice and support on growing your company.

If you intend to grow your company using careful cash flow management, your accountant will help you plan your expansion in stages, setting targets for each stage which, when achieved, can unlock the next stage of growth.

Alternatively, if you want to grow using external funding, either via an expansion loan or by attracting investors, your accountant will help you prepare the financial and operational forecasts for each stage of growth so that a lender or investor gains the confidence they need to back your proposal.

An Accounting Gem helps you take advantage of opportunities and threats

No matter at what stage of development, companies are sometimes subject to major swings in revenue. Sometimes this is caused by a temporary change in the market, the arrival of a new competitor, a key member of staff leaving, and more.

If turnover has substantially increased in recent months, this opportunity may be disguising a number of threats – threats often caused by a business owner chasing revenue but not controlling their costs as carefully as usual. Spikes in turnover may lead to over-purchasing of stock or the hiring of new members of staff who may not actually be needed. If turnover returns to normal levels, a lot of cash that would otherwise have been free is tied up in excess stock and is being drained faster because of increased fixed costs.

If turnover has substantially decreased, the threat may actually present a number of opportunities. Together with your accountant, you can analyse in detail each cost to justify its continuation. If you can’t see the added value in that cost, it can be (subject to any contracts you’ve signed) discarded. You can use the reduction in turnover to rapidly streamline all aspects of your business so that, when turnover does return to normal levels, your profit levels on that turnover are higher than before the downturn.

Services built around your commercial needs with An Accounting Gem

You may wish to choose an in-house bookkeeper and or accountant to establish and maintain your company’s financial recordkeeping systems. Your annual investment in wages for these two members of staff will be significant however and do you really have enough work to keep them both busy for 40 hours a week?

At An Accounting Gem, we provide all of the services and support listed above (and more) for a fixed monthly fee.

Your An Accounting Gem partner is here to help you at all stages of the business cycle from start-up to expansion to exit. Get in touch with us on 01473 744 700 or email us on contactus@aag-accountants.co.uk.

By now, businesses are starting to understand the impact that coronavirus is going to have on our economy, and on various sectors. For some that impact is already being keenly felt, such as in the hospitality and leisure industries. For others, it is only a matter of time.

However, now is not the time for companies to bury their heads in the sand and wait for it all to be over. This is the perfect time to look at what you can do to minimise the damage likely to be caused by the pandemic and put some resources into place to keep your finances on the straight and narrow.

A recent package of government support measures, announced by Chancellor of the Exchequer Rishi Sunak, goes some way towards helping businesses stay afloat, and there are a number of other things that organisations are starting to do in order to bolster their profits for the coming months.

Whilst there will still be plenty of difficult decisions that need to be made in the coming weeks, now is the time to see what you can do to improve your cash position and make preparations for the hardships that are likely to occur later on.

Here are some of the most practical actions that small firms can take right now.

Delay Tax Payments

HMRC are willing in some cases to delay or defer tax payments in order to help small businesses to manage their cash flow. You can call 0800 0159559 to speak to HMRC today.

Get Debt Support

Most businesses will face a crisis in the form of debts in the coming months, as payments become due whilst business is slow. There are plenty of debt advice sites and phone lines available to support companies at this time, and your accountant or financial adviser can also provide you with solutions.

Look Into Loan

This is actually one of the easiest times to get a business loan, thanks to the Coronavirus Business Interruption Loan Scheme (CBILS). The scheme was recently launched as a way to help businesses to access a range of financial products, including loans and overdrafts, to ease their financial worries during the COVID-19 crisis.

Whilst the borrower is 100% liable for the debt, the government has promised to provide lenders with a guarantee of 80% on any lending in order to give banks and lenders more confidence in providing finance to smaller firms. It is important to note that there can be no requirement for director guarantees for loan amounts under £250,000.

Business Rates Relief

For High Street businesses in England, including all retail, leisure and hospitality businesses, there will be no business rates due in 2020-21. This will automatically be applied to your council tax bill in April 2020.

Apply For Job Retention Support

All UK employers are able to access grants from the government to cover part of their employee’s salaries during the crisis, in order to retain staff that otherwise would have had to be laid off. HMRC promises to reimburse 80% of furloughed workers wages, up to £2,500 per month

Head Online

For businesses who want to continue working and providing services throughout the pandemic, and whose work is conducive to an online environment, there may be ways to carry on some aspects of your business. Shops and restaurants may be able to provide an online delivery service, whilst others can provide services via email or video chat.

Some companies are even hosting events, setting them up online so that people can pay to watch and take part. There are plenty of apps and other technologies for this, including Facebook Live, Zoom, Microsoft Teams, Google Hangouts and IGTV on Instagram.

Prepare Your Cash Flow

One of the most critical measures that you need to take now is to prepare your cash flow so that you are fully aware of where you stand and are able to work out what package of support you might require in the future.

Address Your Financial Situation In Full

You need to look at the full picture of your business’s financial health, and make a report that demonstrates a clear understanding of your own finances. In order to obtain government or bank support and lending, you will need to provide records that show that you are in control of and understand your cash position.

Get Some Cash In The Bank

Whilst it is important under normal circumstances to have a good mix of cash and assets, in the current climate it makes sense to ensure that your bank accounts have sufficient liquidity to cope with the ensuing weeks and months.

Sell any unwanted assets in order to top up your bank accounts, and try to call in debts now, whilst other companies and organisations are still able to meet demands.

Keep Taking Orders

Whilst it is unfair to take money for services that you aren’t 100% certain that you can fulfill, you should still be taking orders that you know that you can see through, and take payments for existing customer orders that are already in process. Keep a close eye on your orders, though, and don’t allow yourself to get carried away if you are unsure at any point that you will be able to meet demand.

Capacity Checking

You may be one of the lucky businesses that is able to practice remote working, and is thus able to carry on somewhat in the same capacity as before, with a few minor changes. However, it is critical that you ensure that you put measures in place to ensure that staff have everything they need to do their jobs remotely (such as the right software and equipment).

You should also be monitoring your employees to see how they are managing workloads and working from home. This information will help you should you decide to use the Job Retention scheme.

Apply For Government Support Sooner Rather Than Later

In the current climate, it is fair to assume that a majority of businesses will be looking for some form of support from the government, to ease their financial worries. Once you have all of your information ready, make your application for government support as soon as you can, as it is likely there will be some backlog over time.

Not Sure Of Your Next Move?

These are unprecedented times for our country, with the Government being forced to “slam on the brakes” on the economy in order to tackle the current crisis.

Many companies have gone into enforced hibernation and are waiting to see how a post Covid-19 economy operates, before they take the risk of opening up and trading again in some capacity. With the protection of cash and assets being the current priority of most company owners, it is no surprise that trade has reduced dramatically.

The longer this uncertainty continues the more likely it is that more companies will need government assistance to survive. If you are not sure of the next move for your business and want some advice then please get in touch with An Accounting Gem Limited on 01473 744 700 or email us on contactus@aag-accountants.co.uk for further assistance.

For new businesses, finding investment can be the most nerve-wracking part of getting set up. With thousands of start-ups springing up every year, investors receive dozens of pitches every day, and it will take something special to convince them that yours is the right company to choose.

It is not uncommon for entrepreneurs to meet with dozens of investors before they are able to secure any funding, which means that it is best to try to research as many different types of investor and types of funding as possible, to give yourself a better shot at finding the right fit for your business.

Some of the avenues you could consider include:

Angel Networks

An angel investor is a wealthy individual looking for small businesses to invest in, with the idea being that if they choose the right investment, they will be able to capitalise on the ‘next big thing’ right at the start.

An angel investor is a great option for small businesses, as they not only supply capital, but are also able to provide mentorship, business advice and access to their own business networks.

Finding an angel investor means putting in the time and effort, looking for the right type of individual who will fit with your business and take a real interest in what you are selling.

There are a number of angel networks online, with a couple of the best being the Angel Investment Network and the UK Business Angels Association. Both have thousands of angel investors available, with information available on the types of investment they are looking for.

SEIS/EIS

Securing investment means more than having a great idea and a strong business plan. One of the key factors in getting investment in the UK is your SEIS/EIS eligibility.

The Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) are two programmes set up by the government to incentivise investment in small business through tax breaks. Your business will be a much better prospect for any investor if they are able to see a return on their investment right away.

• SEIS is for the smallest businesses, still at a very early stage (or Seed stage). An investor is able to invest up to £100,000 every tax year under this scheme, to receive a 50% tax break. Start-ups and entrepreneurs are able to raise a maximum of £150,000 in SEIS funding.
• EIS is more suited to businesses who are further along in their development, as investors are able to put up to £1m into the business per tax year, to receive a 30% tax break. Businesses can receive a maximum of £12m in EIS funding.

Under these schemes, investors also benefit from not having to pay any inheritance tax on shares owned, for a minimum of two years. If a loss is registered on shares sold at any point, the investor is able to offset these against their capital gains tax burden.

The HMRC website provides an exhaustive list to help you to decide whether or not you are eligible to apply for either scheme.

Crowdfunding

Whilst crowdfunding has gotten something of a bad reputation in recent years, with a proliferation of crowdfunding websites and causes springing up at once, it is still a promising idea for start-ups and entrepreneurs.

Because you come to a crowdfunding platform with your own marketing and community, it provides investors with a better idea of how successful your business is likely to be. To make your crowdfunding project more likely to be successful, it helps to:

• Bring your own crowd. With investment from your own supporters and community, investors are able to see that you already have an interested crowd, making investment in your company appear less risky.
• Take time to market yourself. You want to provide proof that you are dedicated and business-savvy, and are able to create a buzz on your own before an investor has even gotten involved.
• Stand out from the crowd. Work out what your USP is and capitalise on it. Make sure that you have a brand that can’t be ignored.

Friends And Family

According to research, 38% of funds raised by start-ups comes from friends and family. These are the people that are likely to care the most about your success, who will have the most trust in you and won’t charge you significant interest or want to take huge shares. For start-ups, this can be the least stressful way of securing funding.

Bear in mind, though, that although your friends and family are unlikely to ask difficult questions about financial projections and business valuations, they will want to see that their money is being used well. In some cases, the pressure to achieve can be even more when the money tied in with the business belongs to the people closest to you.

You must also be sensible and ensure that you work with a lawyer when it comes to drafting up your venture deal, so that they can explain the risks and benefits and make sure you have a solid agreement put in place.

Venture Capital

Venture capital funding is one of the trickiest and most difficult forms of funding to obtain. Most start-ups will never get it and many argue that they should never even try to!

Most businesses who look to venture capital funding are those who have already been around for some time and have proven their worth and market value. It is at this point that they’ll look into venture capital to give them the extra funding they need to expand.

Venture capital companies are looking for businesses who can offer real proof of their value, as well as a firm understanding of the exact route they need to take to expand. They don’t want to take a supporting role, simply capitalise on what is already there by providing the funding necessary. It is also true that this type of investment often means giving up a lot of control, which businesses can find it hard to take.

As mentioned previously, it is an option, and one which many companies have taken up successfully, but there are arguably better options when you are first trying to score investment.

Next Steps

Seeking investment is your business is a complex process, and to ensure success you need to have a convincing “pitch”. Without one of these, then your chances of finding funding are greatly diminished.

You need to demonstrate you have a firm understanding of where you are now, and where you want to be. Being able to show a firm grasp on the marketplace and a deep knowledge of your finances, with a costed and comprehensive business plan, goes a very long way in convincing someone that an investment in you is going to succeed for both parties.

An Accounting Gem can work alongside you in getting your business plan and financial projection to the standards required. Our expert team have extensive experience in helping businesses large and small with this process and would welcome the opportunity to work with you.

Call today on 01473 744 700 or email us at contactus@aag-accountants.co.uk to see how we can help you and your business.