finance in dorset 2017 - start up session
TRANSCRIPT
Finance in DorsetSam Chapman, Partner
Businesses trading for < 2 years…….
pkf-francisclark.co.uk
Structure of morning
• Background, Equity, Debt and Business Support (8.30am to 10am)
• Dorset Chamber • Banks: an overview• Equity and Grants• Growth Hub
• Coffee Break (10am to 10.25am)
• Funding, Business Support, Investment Ready and SME perspective (10.25am to 12noon)
• Start Up (trading for < 2 years) • or Established Business
• Lunch and Networking (12noon to 1pm)
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• Business structure: Sole traderPartnershipLimited Company
• Red Tape: HMRC registrationAccounting systemsPensions and Auto-Enrolment
• Ongoing services: PayrollManagement accountsTax planning/remuneration strategies
Issues facing start up businesses
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• Strategies for growth: Business plansCash flow projectionsAcquisitions/disposals of trade or assetsGrant funding
• Tax opportunities: R&DPatent BoxUtilising taxable losses due to CA’s and
investment
Issues facing start up businesses
pkf-francisclark.co.uk
• 10 minute presentations on:• Start Up Loans• SEIS/EIS• Investment ready x 2• Cloud accounting• University support• Support for exporters
• SME Perspective
Funding and support – for business < 2 years old
SWIG Finance
Start Up LoansPeter Casey
• Government-backed low interest loan (6%)
• Free business support• £500 to £25,000• Repayable up to 5 years • Trading up to 24 months• Loans to business owners• Can include business
purchase
Operating across the South WestOver 1,000 entrepreneurs with over £7.3 million in 4 years
Our clients are Award Winning!
Thank you for listening.
[email protected] 223 883
Investment ReadyRichard Wadman
Structure
Selecting the right funding• Options
• Choosing
Getting ready• General
• Specific
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Selecting the right funding: Options
• Friends / family
• Angel investors
• Venture capital (VC)/ Private Equity (PE)
Equity• Banks
• Other organisations
• “Alternative finance”
• PE/ VC
Debt• Government
• EU
• Intermediaries
Grants
Crowdfunding
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Selecting the right funding: Choosing
Understand funding
options and funders
requirements
Understand your
requirements
• Competitive process
• Tailor your pitch but do not change your your business model to fit
• Know the deal breakers: theirs and yours
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• Business plan
• Projections
• Housekeeping
Getting ready: General
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• Industry & current operations
• Future strategy
• Communicates “business case”
• Professional
• Especially important for start-ups
• Tailored
Business plan
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• Realistic• Supported
• Add up• Underpin business case
• Profit & Loss• Monthly
• Cash flow & balance sheet
• Cash headroom
• Sensitivities – Negative & Positive
Projections
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• Licences / contracts
• IP ownership in the company?
• Books and records in order?
• Tax VAT, PAYE/NI
• Statutory Accounts/management accounts
Housekeeping
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• Equity
• Debt
• Grants
• Crowdfunding
Getting ready: Specific
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Equity: Funders requirements
• Growth
• Often no market so are “locked in”
• Exit route and returns to the investor
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Equity: Getting ready
• Be prepared to discuss valuation
• Investors expertise vs. loss of independence?
• Passive / active?
• Restricted matters?
• Potentially more subjective: softer skills / enthusiasm / excitement
• SEIS/ EIS
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Debt: Funders requirements
• Cash flow – serviceability / headroom / sensitivity
• Security / personal guarantees
• Covenants – achievable / appropriate
• Government initiatives – eligibility
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Debt: Getting ready
• Numbers and accounts in order
• Projections
• Credit rating
• Shop around
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• Project – i.e. usually not for general expenses
• “Project” eligibility – sector, size, location…
• Ongoing compliance.
Grants: Funders requirements
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Grants: Getting ready
• Timescale – prescriptive, process and panels
• Match funding
• Competition
• Cash flow – claim in arrears
• Admin
• Patience
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Crowdfunding
• Debt / equity, subject to conditions
• “Reward”
• Variety of platforms
• Opportunity for exposure & feedback
• Marketing / enthusiasm for business
• Different but the same…
An Introduction to Cloud AccountingSam Chapman: Partner March 2017
Contents
• What is cloud?
• And cloud accounting?
• So, why?
• Demonstration
• Anything else?
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What is cloud?
..What is it?
Cloud technology is simply to host, or store, data remotely rather than on a machine at your premises.
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And cloud accounting?
• Multi-user & multi-location
• Immense server processing power
• Machine learning
• Application programming interface (API)
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So, why?
• Time = Money
• Time saved on your books is time to invest in your business.
• Make business decisions based on real time data.
• Automated bank feeds
• Invoice recognition
• Dashboards
• Management accounts
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Automated Bank Feed
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Processing Power
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Image Recognition
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Image Recognition!
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Dashboards
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Dashboards!
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Management Accounts
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Anything else?
• Cash
• Automate invoicing and debt collection
• Sell your debtor book
• Pre-approved in-app finance?
• Integrated business solutions – link:
• Website, PayPal, Stock Management, CRM, etc.
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Who to contact?
Jessica Tubbs MAATHead of CloudSourcing, East [email protected]
Sam Chapman [email protected]
pkf-francisclark.co.uk
SEIS / EISJulian Smith
Equity Investments
- Cash invested into a company in the form of subscribing for shares
- Most commonly, shares are either ordinary or preference shares
- Understanding what it means by giving up an equity stake in the business
- Tax incentives on offer for certain investments in ordinary shares
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SEIS / EIS
• Equity Incentive Schemes – offer of tax incentives to investors to encourage investment in start up / relatively new businesses
• Often considered where debt cannot be obtained (or only offered on unattractive terms)
• Given up an ownership stake in the business – how much are you willing to give up?
• HMRC’s view is that the schemes are aimed at companies with a high financial risk
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Tax relief for investorsRelief SEIS EIS
Income tax relief 50% (max inv. £100k) 30% (max inv. £1.0m)
CGT exemption Yes – after 3 years Yes – typically 3 years from date of issue
CGT deferral No Yes
IT loss relief Yes - potentially Yes - potentially
BPR Yes Yes
The above are subject to conditions and rely on continual qualification in the period after the issue of shares.
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Seed Enterprise Investment Scheme (“SEIS”)
• Companies where trade is less than 2 years old
• Up to £150k can be raised through the issue of SEIS shares – limit reduced by any other State Aid received in the 3 years preceding the issue of SEIS shares
• New shares must be issued in return for ‘new’ cash
• Cash used for the purposes of a qualifying trade and spent within 3 years of the share issue
• Individual investors cannot be connected with the company
• Less than 25 employees / no more than £200k gross assets
• Numerous other conditions
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Enterprise Investment Scheme (“EIS”)
• Typically for companies < 7 years old
• Can raise no more than £5m in any 12 month period – includes from any venture capital scheme and other state aid investment e.g. certain grants
• New shares must be issued in return for ‘new’ cash
• Cash used for the purposes of a qualifying trade and spent within 2 years
• Individual investors cannot be connected with the company
• Numerous other conditions
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Practical considerations
• Is your company carrying on a qualifying trade?
• Applying for advance assurance to give investors certainty.
• Method for attracting investors – business angels, crowdfunding, equity funds
• Valuing the company and offer price
• Professional costs
• Steps to ensuring and monitoring compliance e.g. separate bank accounts
• Dual SEIS / EIS offer
Investor Ready : approachingthe bankPractical tipsMike Isaacs
Relationship ManagerNatWest Business Banking
The content of this document is classified as PUBLIC
02/05/2023The content of this document is classified as INTERNAL50
Mike Isaacs
Security may be required. Product fees may apply. Over 18’s only. Business Turnover of up to £2 million. Excludes refinance and Commercial Real Estate FinanceAny property used as security, which may include your home, may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it
Assessing an application, what do we look at?
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You1
Contribution2
Business plan and Forecasts3
Affordability4
Credit history5
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You
Why do you want to set up in business?
Support network
Contingency planning
Strengths and weaknesses
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Contribution
Typically 50% contribution
Demonstrates commitment and confidence in your project
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Business plan
Competition
Route to Market
Advertising and Marketing
Your background
Breakdown of costs
SWOT analysis
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Affordability
Cash Flow Projections
Assumptions
Seasonality
Cost of your product
How much you expect to sell
Wages
VAT
Loan repayment figures
02/05/2023The content of this document is classified as INTERNAL56
Summary
Have some cash behind you to get started
Have written a detailed Business plan and be prepared to answer questions about it
Have prepared a realistic Cash flow projection
Have sought help from professionals should you need any help with preparing the necessary information
02/05/2023The content of this document is classified as INTERNAL57
Boost your Business with NatWest
Lucy Kitcher Business Growth Enabler
[email protected] 636336T:LucyKitcher2
Each month we host the Boost Board which is a free event open to local businesses looking to grow.
2nd Wednesday monthly – 8th March9.30 -11.30The Factory, Alder Hills
Details are on Eventbrite or ask Lucy.
Regional Economic Engagement
Prof Nigel Jump
What we do
Education Research
Professional Practice
Connectivity Of Our Strategies
Regional Economic Engagement
Community & Civic Regional Engagement
Global Engagement
How do we interact with Industry and Commerce?
• Via Knowledge exchange (KE), a process which brings together academic staff, users of research and wider groups and communities to exchange ideas, evidence and expertise.
• Overall aim is to contribute to economic, social, cultural and environmental benefits to society.
Strategic & Internationa
l PartnersIncubat
or
Public Engagement
Business Intelligence Reports
Festival of Learning
Festival of Design &
Technology
Festival of Enterprise
BFX Festival
Inaugural Public
Lectures
General Interest
Seminars
Regional Economic &
Environmental Impact Model
Data Portal
Round Table Discussion
Groups
Research, knowledge exchange and CPD
Research• Global Security, Finance, Economics,
Tourism, Health, Creative and Digital, Engineering, Environmental Science and many more…
• All Faculties offer CPD opportunities
Funding Opportunities
• Knowledge Transfer Partnerships (KTP)– 3-way project partnership– Match-funded PhDs
• SMART awards – Proof of concept– Proof of market– Development of prototypes
• European Funding• Horizon 2020
Student Interaction
• Placements and Careers– 100% students offered placements– 92% of graduates are employed or in further
study within 6 months of graduation• Student Project Bank
Student Project Bank
• Launched February 2016• External projects needed for students to
work on as part of their academic studies– Cannot be business-critical
• Student-centred initiative • Benefits students and Industry sponsors
Our Commitment
To help create a prosperous, economically dynamic and sustainable regional economy.
To identify and support development opportunities that will add to the region’s economic capacity and wealth.
Andrew J Large CMAInternational Trade Adviser
Your Partner for International Trade
07469 [email protected]
Export for Growth: ERDF
New support programmes for SME’s
KnowledgeKnowing what to do – and why do it
Skills Knowing how to do it – and with what
Confidence Readiness Effectiveness
Baseline ServiceExport Savvy
Trade Development SupportE-Commerce
Export OpportunitiesOMIS
High Value OpportunitiesEvents and missions
DIT Core
Export Essentials
Ready for Export (Workshops)Market Research Scheme
IP Assessment SchemeInvestment & Funding Scheme
International Mentoring SchemeOverseas Visit Support
Digital Marketing SchemeGrant Funding
New(New/Novice Exporters)
Extend your Global Reach
High Growth Market SupportMarket readiness & planningSales & Marketing StrategyCommercial development
Risk assessmentMarket visit preparation
Market entry supportIn-country commercial
assistance
New(Experienced Exporters)
Export for Growth/ERDF Summary
• Three+ year Project 2016-2019 focused on SMEs across 6 LEP areas in the South West
• Purposes to……
• Help more first time exporters
• Help existing exporters enter growth markets
• Create new jobs.
• New support programmes & possible (no Guarantee) Grant.
EligibilitySMEs in designated LEP areas - priority given to LEP selected sectors
• Export Essentials
• Propensity to export characteristics
• New or novice exporter
• Extend your Global Reach
• Experienced exporter with potential of £5m turnover+• Potential to compete in LatAm, India, China or SE Asia• Investment in market development £30k+
Support Delivery Timeline
Closed
Available
Ready for Export Workshop
Market Research
IP Advice Market Visit Advice
Digital Marketing
Enterprise Mentoring
Finance & Investment
Extend your Global Reach
Grant Funding
Ongoing Ongoing N/AOngoing Ongoing Jan2017
Jan2017
Ongoing Three WindowsIn 2017
International Trade Advisers providing tailored support throughout the project
• Focused on new to export SMEs• International Trade Adviser (up to 24 months)• Ready for Export - 1 day induction workshop• Up to 36 hours support from 3 of the 6 Schemes……
• Eligible to apply for grant up to £30K
Export Essentials
MentoringScheme
Market ResearchScheme
IntellectualPropertyScheme
DigitalMarketing
Scheme
InternationalMarket Visit
Scheme
Funding &Investment
Scheme
Export Essentials
Customised
Consultative support focused on growth markets
• Latin America, China, India and South East Asia• Overseas Market Specialists combined with outsourced in-
territory sales and marketing support • Up to 12 days consultancy
Extend your Global Reach
Extend your Global ReachOMIS
4
MarketReadiness
Assessment
Research & Planning
Sales & Marketing
Strategy
Preparation and risk
assessment
Market Entry Support
Ready for Export – One Day Workshop (Voluntary) Facilitated by professional trade advisers
Ready for Export
Workshop
Sessions that explore:• export success stories• clarifying and setting export goals• addressing fears about export and gaps in
knowledge• develop understanding of key areas for
business and personal development • key steps to take with an action plan
created on the dayFollowed through with a local International
Trade Adviser
1. Funding and Investment Advisory SchemeSpecialist support to help navigate the labyrinth of funding and investment sources through one of two options available
• Attend Funding and Investment clinics
• Full review of needs with specialist advice on best ways to access funding, finance and investment
Funding and Investment
Scheme
2. Digital Marketing Support SchemeOne-to-one specialist support to provide insight into the potential of digital marketing and show you ways to maximise its potential
• Gain deeper insight by joining a Digital Marketing master class or clinic
• Follow up with one-to-one on how to maximise Digital Marketing with access to a specialist
DigitalMarketing
Scheme
3. International Market Visit Advisory Scheme
International Market Visit
Scheme
• Advice and guidance for overseas trade shows, exhibitions and seminars
• Facilitate pre & post-visit support aligned to OMIS
• Coordinate overseas visit including liaison with
UKTI post in market, Embassy and OBN
• Facilitate pre and post-market visit briefings
• Assist with planning and travel arrangements
4. International Mentoring SchemeOne-to-one business mentoring for between 6-12 months
InternationalMentoring
Scheme
• Explore personal and professional situation• Develop strategies and goals for positive
impact on business development• Release and develop resourcefulness• Explore variety of options to consider
alternative actions in order to solve problems
Using SFEDI (Small Firms Enterprise Development Initiative) accredited mentors, the Government-recognised UK Standards Setting Body for Business Support
5. International Trade Research SchemeSpecialist support and face to face advice about market research, market selection and desk-based market research
• Full review of market research needs• Support on how to effectively use market
research to determine export strategy, plan research projects, source published reports and other sources of information
• Facilitate support for market research and advice on market entry and market development strategies
• Free desk-based market research and report for selected market
International Market
Research
6. Intellectual Property Protection SchemeSpecialist adviser to help SMEs navigate the complexities of IP
• One-to-one IPR clinics run locally (duration 1 hour) learning about IP and how to get the right protection for your company
• Face to face company visit from an IPR expert who can undertake a comprehensive review and audit of your current and future protection needs. A detailed report containing advice, recommendations and guidance on appropriate action to take
Intellectual Property
ProtectionScheme
Finance in DorsetMitchell Stuart
Founder & MD: Inferno Media
Social Media Wiz
20 Years Old
GCSE School Drop Out
“It’s hard to beat a person who never gives up.”
- Babe Ruth, Baseball Legend
Quick Facts - Inferno Media
HSBC / Barclays
Virgin StartUp
Virgin StartUp - Numbers
£20,000 fixed 6% over 5 years
Monthly payments of £390
Putting £5k away for the 1st year
Softwares
Finance in the South West – wrap upSam Chapman, Partner
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Summary
• Dorset is a great place to do business and has great businesses
• Dorset is full of entrepreneurial spirit (businesses and funding options)
• Funding and business support here…
• http://www.francisclark.co.uk/news-views/blog
• Thank you
pkf-francisclark.co.uk
Presentations
And more… (24 presentations in total, covering “full range” of funding and business support options)
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Structure of morning
• Background, Equity, Debt and Business Support (8.30am to 10am)
• Dorset Chamber • Banks: an overview• Equity and Grants• Growth Hub
• Coffee Break (10am to 10.25am)
• Funding, Business Support, Investment Ready and SME perspective (10.25am to 12noon)
• Start Up (trading for < 2 years) • or Established Business
• Lunch and Networking (12noon to 1pm)
(c) copyright PKF Francis Clark, 2017
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