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Why SMEs won’t ditch Green intentions despite ongoing financial uncertainty

SMEs’ face an unclear future. Hit with high interest rates, supply chain issues, increases in wages and a worsening cost-of-living crisis while at the same time demand for working capital has reached unprecedented levels.

Kai Hunter, Executive Director at Conister Finance & Leasing explains that research her company undertook recently revealed that over a fifth of UK SMEs that required external finance over the last two years, were unable to access it. What’s more, over a quarter have had to stop or pause an area of their business because of a lack of finance.

You might assume therefore, that SMEs would ditch their Green intentions – assumed to be too expensive and a ‘nice to have’. Indeed, a third of businesses surveyed in a recent study by Barclays cited financial constraints as the reason behind their failure to go Green.

16% were concerned around the return on investment with Green technologies and 19% of businesses said they only invested in greener processes because of regulatory demands. Seemingly at this time SMEs would move into survival mode and source the already depleted levels of capital from wherever they could get it, regardless of ESG or Green criteria?

In fact, no, SMEs remain more committed than ever. SMEs are driving forward Net Zero targets, with two thirds saying they have a plan in place to reach Net Zero by 2050, according to Lloyds Bank’s Net Zero Monitor.

Moreover, 7% of SMEs have already reached Net Zero emissions. Consumers have followed suit – Deloitte’s 2021 sustainability and consumer report found that 32% of consumers were highly engaged with adopting a more sustainable lifestyle last year and want brands to lead the charge. 64% of consumers want brands to reduce packaging,

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50% want more information on how to recycle and 46% said they desire clarity on sourcing of products. Barclays’ research also revealed 75% of businesses situated across all sectors, have seen vast commercial benefits following the adoption and inclusion of Green technologies in their operations.

So, what is driving this determination for SMEs to be Green? One reason is cost. It’s not because SMEs have to be Green but if they don’t, they’ll be paying much higher rates on financing.

Lenders, both mainstream and alternative across the board, have adapted their models to offer the best rates for those firms that are ESG compliant and Green. It’s a necessity not a requirement. For example, Conister’s current rates for financing are around 50bps less for SMEs that adopt a Green approach.

The opportunity to be Greener as an SME is great. In the UK, SMEs already represent more than 90% of clean tech enterprises and is therefore a significant driver of Green growth. SMEs in the UK have already seen a drop in their running costs as a result of making more environmentally-focused investments.

This is becoming an increasingly attainable option as Green technologies such as solar PV systems are becoming more accessible, with initial implementation costs being offset in the long term.

SMEs are however continuing to struggle with accessing finance and, worryingly, this lack of availability is costing them and the UK economy in terms of growth at a time when it is needed the most.

Yet apart from demonstrating a necessary commercial responsibility towards the environment, adopting more conscientious Green measures make it more attractive to consumers and potentially help grow the business and provide a strong foundation for the future.

Gone are the days where being Green came at a price, SMEs are realising that to generate the necessary capital to grow and agree the best rates with lenders in an uncertain economic environment, it pays to be Green.

Source: Business Matters Magazine

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1 in 2 SMEs Experienced Surge in Cyber-Attacks

Over half of UK SMEs (54%) have experienced some form of cyber-attack in the last year a new report by Vodafone Business has found.

The research, which is published today in a new report from Vodafone ‘The Business of Cybersecurity’, polled over 500 small and medium business owners across the UK and found that more than half (54%) had experienced some form of cyber-attack in the previous 12 months. This is an increase of 15% when compared to similar research conducted by Vodafone two years earlier which found 39% of SMEs had experienced some form of cyber-attack.

The findings point to a rising risk for SMEs to stay safe online, especially with more people working remotely and many businesses reliant on digital technology.

Vodafone’s study also found that one third (33%) of SMEs had seen the number of attempted cyber-attacks against their business increase, whilst just 18% had seen the number go down. About one in five (19%) SMEs said that an average cyber-attack could cost their business up to £4,200, a loss they would be unlikely to bounce back from in the current cost-of-living crisis.

The rise in online attacks comes as ONS (Office for National Statistics) data indicates that more than a third of businesses in the UK now use a hybrid working model. The National Cyber Strategy 2022 has also stated that a growing dependence on digital technologies for remote working and online transactions has “increased exposure to risks”.

Since Vodafone last examined the cybersecurity risks facing SMEs in 2020, the invasion of Ukraine and continuing geopolitical tensions have had an adverse effect on the cybersecurity landscape, prompting the National Cyber Security Centre (NCSC) to warn that: “now is not the time for complacency.”

Despite this, 18% of SMEs polled by Vodafone said their business was not protected with cybersecurity software whilst 5% did not know if they had protection and only 28% were aware of the Government’s Cyber Essentials scheme. The findings echo previous findings Vodafone, such as in last year’s SMEs Like Me report which revealed only 8% of SME business leaders saw cybersecurity as a priority.

To ensure that more SMEs are protected from online attacks, Vodafone is calling on the Government to do more to raise awareness of current initiatives to support the delivery of local cyber security skills. This should include providing the required funding to run a targeted ‘Cyber Safe’ awareness campaign for SMEs.

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Andrew Stevens, Vodafone UK Head of Small and Medium Business said: “Last year we outlined the significant and detrimental impact of a cyber-attack on a small business, to the tune of up to £3,230 per attack. This figure has now subsequently risen to £4,200, which is a consequence from which most SMEs would not recover.

“These findings reflect a lack of adequate skills and information to equip small business owners with sufficient protections and whilst we welcome the progress that has been made by Government with the establishment of nine regional Cyber Resilience Centres across England and Wales, it’s clear that more needs to be done to support SMEs with their cybersecurity and help them protect their business online, especially during a cost-of-living crisis where they are most vulnerable.

Tina McKenzie, Policy Chair of the Federation of Small Businesses (FSB) said: “The digital economy presents a huge opportunity for small firms to reach new markets and customers, but these benefits come with challenges. This report sheds light on how vulnerable small firms become targets of criminals in the cyber space, when they’re often less able to absorb the cost of crime.

“We’re pleased to see a recommendation to raise awareness on cyber resilience among the small business community through relevant Government campaigns included as part of this research.

“We encourage internet service providers to take on more responsibility for cybersecurity, along with software vendors, hardware developers, the banks and other financial intermediaries – they’re the best placed and have the resources to implement the most effective measures.”

By Eva Dixon

Source: Verge

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15 Bright Ideas For Starting A Small Business

More people are deciding to work for themselves – throwing their energy into their own small business in a bid for greater flexibility and control over allocation of their time.

There are more than four million self-employed workers in the UK – a number that has grown steadily over the past two decades.

But if you’re thinking of going it alone, what are the best small business ideas that require minimal set-up costs and professional training? We’ve compiled 15 of the most popular:

1. Tutoring
If you’re an expert in a particular field – whether it’s maths, languages or playing the violin – you could make money teaching.

You don’t need any formal qualifications to be a tutor but some students (or their parents) may expect you to have a degree. Some previous experience of teaching is probably also useful.

Tutoring is now more accessible than ever with remote lessons via Zoom or the like widely accepted. You can also opt to go solo or join a tutoring platform. While you’ll probably have to pay to list online, taking this approach is likely to widen your client base.

2. Pet care
Animal lovers could consider setting up a pet-sitting business – whereby you spend time with clients’ pets while they’re at work or on holiday. This could be at their home or yours.

If you have the space at home for the right equipment you could invest in a grooming business – or, if not, the mobile equivalent. Dog walkers are also in high demand and, other than trust and reliability, don’t require any special credentials.

3. Home cleaning and gardening
Cleaning and gardening is flexible when it comes to earning extra cash. You might want to take your own cleaning supplies (which can be factored into the price) but equally, it’s acceptable to ask the client to provide them.

You can think about adding laundry or ironing services if it might boost your earnings. For gardening, diversification could mean design, landscaping or garden clearance.

4. Cake making
Talented at baking and decorating cakes? Or perhaps artisan sourdough is more up your street? It’s possible to turn skills like this into a successful business.

However, if you’re preparing food in your home to sell to the public you will need a food hygiene certificate and you’ll need to register with the environmental health department at your local council. Think about the best ways to market your new business through local press, for example, and on social media.

5. Personal training
Personal trainers are part workout and part motivational experts. It’s their job to develop workout plans to help clients either lose weight or meet other fitness goals.

Training and qualifications are necessary if you want to work in a gym or as a freelance PT – which will take time and money. But it could pay off, with trainers earning anything from £40 to £50 an hour or more depending on your location and target market. As well as 1-2-1 sessions, you could take group classes and bootcamps, too.

6. Personal assistant services
Workers who thrive on organisation and an Excel spreadsheet could flourish offering services to individuals or businesses and company execs.

Tasks might involve organising a diary or calendar, booking travel and other tickets and appointments, as well as other personal admin tasks which save the client precious time.

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7. Sewing and alterations

If you’re talented with a needle and thread, you could set up a business sewing and making alterations for the many who don’t have the skills.

While alterations alone could keep you busy, you might specialise in a particular area, such as handmade wedding and bridesmaid dresses or dance costumes.

You will need to invest in a high quality sewing machine and some basic materials and supplies. You could look to partner up with a local dry cleaner or laundry business as a way of broadening your client base.

8. Copywriter or editor

Most businesses have an online presence – but many won’t be au fait with blog writing, customer emails or website content. It will need to be written and edited by a professional.

If you have experience in writing, all you’ll need is a laptop and a good internet connection. Many writers and editors market their services on LinkedIn or other business social media groups. You could also directly contact businesses to offer your services.

9. Photographer or videographer

This is a great business for creatives with an eye for composition. You can be a generalist or choose to specialise – such as creating training videos for corporate clients, for example.

You’ll need to invest in some high-quality camera equipment and lighting accessories – or for a videography business, a good digital video camera, lights, microphones and bounce boards to achieve the best quality footage.

10. Bookkeeper

Those who are great with numbers could consider freelance bookkeeping. Bookkeepers sell their services to small businesses that need help managing their accounts, preparing payroll and gathering data for tax purposes.

You’ll need to be well-organised and fully understand the liabilities that can come with handling someone’s finances.

11. Blogger

If you can create a successful blog and build up your subscriber numbers it is possible to monetise it. The most successful bloggers can make an annual salary out of it.

There are different ways to make money from a blog, such as through advertising, affiliate links or subscriptions. Research options and successful blogs and bloggers to find the best route.

12. Removals

If you’re fit, strong and patient, all you’ll need to set up a removals business is a van. However, this line of work is very physically demanding. You’ll also have to be comfortable driving long distances and with busy city driving – as well as parking.

You’ll need liability and van insurance to cover yourself for all eventualities.

13. Market stall

Market stalls can make serious money – if you’re in the right environment with the right products. Whether that’s a food or farmers’ market, antiques or craft fair, you’ll need to book and pay for your pitch, as well as make or source your stock.

14. Setting up a virtual shop

Buying and selling online is probably one of the easiest businesses to start. And finding a market niche should help your business succeed.

If you make your own items to sell you could use Etsy, which is an online marketplace for unique and individual, often handmade goods. Setting up an Etsy shop is straightforward although you’ll need to factor in the transaction fees with each sale.

15. Car cleaning and valeting

This type of business can be set up with very low overheads. You’ll need vehicle cleaning equipment – and your own transportation if you are going to offer a mobile service – but there won’t be many other costs.

Liability and legal expenses insurance are important in case of disputes over accidental damage to customers’ vehicles.

By Jo Thornhill

Source: Forbes

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Budget 2023 what small business can expect

An extension to the ‘super-deduction’ tax break for business investment and tax breaks for companies that help long-term sick and disabled get back into work are being mooted.

This spring’s Budget will focus primarily on halving inflation, the first and most important of Prime Minister Rishi Sunak’s five pledges. But what can small business expect from Budget 2023?

What is the date for the Budget 2023?

Jeremy Hunt is due to make his Budget 2023 statement on Wednesday, March 15. It will be followed by a forecast on the economy and public finances from the Office for Budget Responsibility.

Revamping ‘super-deduction’ tax break

Chancellor Jeremy Hunt and his Treasury team are understood to be looking at a successor to former Chancellor Rishi Sunak’s “super-deduction” tax incentive, a £25 billion tax incentive which encouraged business investment by providing 25p off company tax bills for every pound of qualifying spend on plant and machinery.

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Subsidies for mental health and wellbeing

Work and pensions secretary Mel Stride is reviewing the state of the British workforce ahead of the Budget 2023. One idea is to provide tax breaks to small business owners to help them support the long-term sick and disabled get back into work. There are 2.2 million long-term sick and disabled in the UK. These subsidies would cover physiotherapy, nursing and mental health support.

Digital skills and IT training

Another idea is to offer Government-funded job placements for disability and sickness claimants. The focus is expected to be on digital and IT skills for jobs that can be done remotely – helpful for those who are housebound but want to get back into work

What will not be in Budget 2023 for small business

“Computer says no is just the standard response you get most of the time from the Treasury, but it’s even worse this time round,” one business leader told The Sunday Times. “He mentioned pre-profit taxes, but every time we raise business rates, NICs and duties, the answer is no, it’s not the right time.”

By Tim Adler

Source: Small Business

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How to start a business with no funding

Starting a business with no funding is challenging, but it’s possible. With the right approach and some hard work, you can get your business up and running quickly.

Can I start a business with no money?
In theory, anyone can start a business with no money, and many, many entrepreneurs have done exactly that.

Typically, there are two key parts to successfully launching;

  • Create a business that requires little to no upfront costs
  • Create a clear plan for acquiring paying customers quickly

This will help avoid any cashflow issues and limit any initial risks.

What is the easiest business to start with no money?

The easiest business to start with no money will depend on your skills and resources.

If you’re a skilled writer, graphic designer or web developer, you could offer your services to clients on a freelance basis. This allows you to work to your own schedule and build a client base without having to invest in a costly physical office or staff.

Another option is to start a business that uses your car or even a spare room in your home, to create income. For example, you could start a ride-sharing business or rent out an extra bedroom to paying guests.

What do I need to start my own business?

Once you have your business idea, you will need to take a few important steps.

Firstly, decide on the business structure you would like to use, and register your business. In the UK, the most common business structures are a sole trader, a partnership, and a limited company. Each structure has its own legal and tax implications, so it is important to choose the right one for your business.

Sole trader
As a sole trader, you will be “self employed”, this means you’re solely responsible for all legal requirements of the business. It doesn’t mean you need to work alone, however, because sole traders can also employ staff.

You will need to register with HM Revenue & Customs (HMRC) when you first launch your business and file an annual self-assessment tax return.

You will need to pay income tax and national insurance based on your profits, and crucially, you are responsible (and liable to pay back) any debts accrued by the business.

In a partnership business structure, each partner shares responsibility for managing the company, full liability and any profits generated by the business. One partner, known as the nominated partner, will be responsible for the tax returns and bookkeeping of the company.

A partner could be an individual or a limited company for example, because they also count as a legal person.

In an LLP (Limited Liability Partnership), two (or more) partners are responsible for filing the company accounts. The business structure has more similarities to a limited company, in that partners are limited in terms of their liabilities, protecting their assets. Liability is limited to any monies they have invested in the company and any personal loan guarantees from generating funds to start or maintain the business.

Limited company
Creating a limited company involves incorporating your business with companies house, and paying an application fee.

While this is not ideal for people considering starting a business with no money, it has some longer term benefits which should be considered.

The liability of directors and shareholders (meaning any owners of company stock) is limited to any money they originally invested in the business. Your personal assets and estate are not considered part of the business. That means they won’t be used to offset any debts that may need to be recovered in the future, should any issues arise.

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What if I need investment in my new business?

Getting direct investment
To get direct investment to start or grow a small business in the UK, you will need to create a business plan that outlines the key details of your business, including its products or services, target market, financial projections, and growth potential.

This will help you to clearly communicate your vision to potential investors and convince them to invest.

Next, you will need to identify potential investors and reach out to them to pitch your business idea.

This can be done through networking events, online platforms, or by contacting investors directly. You will want to make sure that the investors you approach are a good fit for your business and have the resources and expertise to help you succeed.

Once you have identified potential investors, you will need to negotiate the terms of the investment, including the amount of funding being offered, the equity stake being given up, and the rights and responsibilities of the investors and the business.

It’s important to carefully consider these terms and seek the advice of a legal professional before agreeing to any investment.

EIS and SEIS funding
The Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) are UK government programs designed to help small, high-risk companies raise capital by offering tax relief to investors who invest in these companies.

Under the EIS and SEIS, investors can receive tax relief on investments they make in qualifying companies. This means that investors can reduce the amount of income tax they owe on their investment, making it more attractive to invest in high-risk companies.

To qualify for EIS or SEIS funding, a company must be a small, unlisted trading company that is not a subsidiary of another company.
The company must also be based in the UK and must not have been trading for more than 7 years.

If a company qualifies for EIS or SEIS funding, it can issue shares to investors and offer them tax relief on their investment.

The amount of tax relief an investor can receive depends on the type of investment and the amount invested;

  • EIS investments – investors can receive up to 30% of their investment in tax relief
  • SEIS investments – investors can receive up to 50% of their investment in tax relief

Getting a business loan
If you need a small amount to get your business started, a loan might be a viable option, rather than giving up any equity to raise funds.

Before applying for a business loan, you will need to consider your options carefully. Think about how much you would like to borrow, how this will be paid back and how long you’d like to borrow for.

You can find out how much you can borrow via a comparison site, broker or directly via a lender or high street bank. Always make sure you compare loan providers to find the best rates before applying.

If your application is approved, the lender will give you the money and you’ll be responsible for repaying the loan according to the terms you agreed on. This will involve making regular payments and paying interest on the loan.

By Laura Rettie

Source: Finance