RESOURCE CENTRE

Your EnterQuest Bulletin - Issue 180

Thought for the week: "The vision must be followed by the venture. It is not enough to stare up the steps - we must step up the stairs." Vance Havne

• Seven cash flow tips you cannot ignore
• Boosting your networking confidence
• Top ten...effects of October red tape
• Web shoppers can buy online with cash
• Too busy to cook? Try a healthy takeaway

If you have any questions about your business idea or target market, or need help tracking down a grant, subsidy or business support in your local area, then send an e-mail with your query and location to the EnterQuest information team and we'll do our best to help.

Send your question to enterquest@cobwebinfo.com.

To access over 800 factsheets, guides and small business reports, go to www.scavenger.net.

Seven cash flow tips you cannot ignore

If there's one thing that's inevitable in business it's that every year, too many small firms will fail. In fact, more businesses fail within five years of starting up than survive.

But why does this happen?

In more than two decades of working with small businesses, we've generally noticed that you can put your finger on one single factor that's common to just about every business failure.

They ran out of cash.

And they ran out of cash because the majority of small business owners, including those that manage to survive, don't understand exactly what is happening with their cash and cash flow at any point in time.

They don't have under control one of the most basic of business principles - which is having a grasp of the flow of cash out of and into their enterprise.

Cash flow worries are a big headache for too many business owners, but this is made worse by the lack of appreciation and understanding of why having cash under control is so critical to survival.

The big problem here is that business owners think being in control of their business finance and cash flow is simply a matter of looking at regular financial statements, such as the balance sheet and profit and loss account.

But these just don't give the full picture. They don't show a business owner their cash position now or at a given point in the future.

So what is it as a new business owner that you can do to help get your cash flow under control? What, from a practical management point of view, will help you spot any cash flow problem long before it hits you?

Have a look at these seven simple cash flow tips that will help you achieve better financial control of your business.

1) Cash is your number one financial priority - put simply, if you run out of cash, your business will run out of life. Always remember this, and think about it every single day that you are trading.

2) Always know today's cash balance - ask yourself this question: "Do I know what my cash balance is today?" If the answer is no, you are not in control of your business, and you can't make sensible, informed or accurate business decisions.

3) Manage from your cash balance - too many business owners manage from their monthly financial statements or bank balance and not from their cash balance, which is the most critical financial information you need to control your business.

4) Always project things ahead - as well as understanding today's cash position, make sure you have cash flow forecasts one month, three months or even six months ahead. If you do this, you'll have a much firmer grip on the management of your business.

5) Keep your cash under control - once you've got your cash flow under control, keep it there. Being in control of your cash all the time gives you the confidence and freedom to concentrate on other aspects of managing and growing your business.

6) Spot cash flow problems before they hit - if you can see a problem coming in time, you can do something about it. If you don't spot the problem before it hits, it will almost certainly be too late to rectify it. Cash flow problems rarely pop out of the blue. They will loom ahead, so be sure you see and deal with them in time.

7) Get someone to help you - most small business owners are pretty poor at recognising the importance of cash and cash flow management, never mind actually doing it. If this applies to you and you struggle to calculate your cash balance accurately, get a bookkeeper, accountant or independent business adviser to do it for you. You won't regret it.

Being in control of your cash flow at all times is critical to success and survival. There is no halfway house with this. Get it under control, or get someone to help you do it. Then you can spend more time on the aspects of running your business that you enjoy and are good at doing, which better reflects why you went into business in the first place.

Our how-to guide to forecasting cash flow provides more step-by-step details, and check out our guide to avoiding cash flow problems for more helpful information.

Boosting your networking confidence

Surveys have shown that many people rank walking into a roomful of strangers and speaking in public amongst the scariest things they can imagine doing.

So if this sounds like a familiar feeling, what can you do to improve your ability to network and get over your fears?

Why not try the following strategies to help you network successfully:

• Remember that networking is about building relationships.
• Attend networking events regularly so that you will be recognised.
• Encourage other people to talk - be a good listener.
• Find common ground - show empathy.
• Be enthusiastic.
• Be the first to offer a recommendation or a favour.
• Follow up conversations you have with the people you meet at events.
• Remember that other people are probably more terrified than you are!

For more practical tips on how to network successfully, see our useful guide to business networking.

And for hundreds of practical tips and techniques about finding new customers, increasing sales and growing your business, check out the UK Small Business Marketing Bible.

Effects of October red tape

A raft of new and amended legislation came into force on 1 October, relating to discrimination in the workplace, the minimum wage, fire safety and maternity rights. Here's a quick summary of the top ten main changes that have taken effect.

1) The National Minimum Wage (NMW) for adults aged 22 and over has increased to £5.35 per hour.

2) The NMW for workers aged 18-21 has risen to £4.45 per hour.

3) The NMW for workers aged 16 and 17 has gone up to £3.30 an hour.

4) Under the Regulatory Reform (Fire Safety) Order 2005, the requirement for businesses to have a fire certificate has been removed, and more emphasis has been placed on fire risk assessment.

5) Businesses can no longer discriminate against staff on the grounds of age, under the Employment Equality (Age) Regulations 2006.

6) The age rules mean that employees cannot be forced to retire before the age of 65.

7) The Regulations also remove the upper age limit for unfair dismissal and redundancy rights, giving older employees the same rights as younger staff.

8) Under the Work and Families Act, statutory maternity and adoption leave has been extended from six to nine months for mothers whose babies are due on or after 1 April 2007.

9) The qualifying criteria for additional maternity leave have been removed, so that all mothers will be able to take up to one year off work regardless of their length of service.

10) The notice period that mothers must give to their employers if they change their return-to-work dates has been increased from 28 days to eight weeks.

Age Positive has produced a range of useful guidance and sample documents to help business owners get to grips with the age discrimination law, and you can get practical guidance documents about the fire safety rules from the Department for Communities and Local Government (DCLG).

Why not also check out our factsheet summarising the most recent employment law changes on the Government's common commencement dates for more guidance.

Each week we provide you with summaries of some popular or emerging business ideas in the UK.

Here is this week's idea:

• Mature Women's Clothing Shop

Regularly improving your vocabulary is not just about learning a new word and its meaning. It will improve your general knowledge and make you feel and act smarter in all sorts of personal and business situations.

Do you know what the word 'bandwidth' means?

a) a term for measuring the reliability, or 'uptime', of an Internet connection
b) the number of PCs included in an account with an Internet Service Provider
c) the speed of an Internet connection
d) the amount of data that can be sent over a network connection in a set period of time

Answer at the end of the Bulletin.

Web shoppers can buy online with cash

Around six million Brits don't have or don't want bank accounts, meaning they're missing out on the online shopping boom - and businesses that sell over the Internet are missing out on their custom. Now financial services firm Allpay.net has come up with what it says is the answer. It's encouraging businesses to put a 'go&pay' option on their websites. This works simply, with the shopper paying at a 'payzone' machine in their local shop - the device that allows people to pay their electricity bills or mobile phone top ups over the counter. If you're thinking of setting up an online store, check out our practical factsheet.

Too busy to cook? Try a healthy takeaway

It may be surprising to learn that one of the healthiest forms of takeaway food is fish and chips, which according to industry body Seafish has a third fewer calories and over 40% less fat than other meals such as chicken korma and cheese and tomato pizza. Opening a fish and chip shop may be a good business idea too, as Seafish also reports that the industry is worth some £1.2 billion, with twice as many meals being sold as by Indian takeaways. For more information on running a fish and chip shop and the market for seafood, see our useful factsheets.

Tools for small food businesses

The website of the National Farmers' Retail & Markets Association has a wealth of information aimed at small-scale food producers of all types, including farm shops, farmers' market organisers and box delivery services, as well as shoppers looking for local food. Some parts of the site aren't up to date and some are 'still under construction', but there are good links to the current 'month of taste' and next month's national conference, as well as archived links to useful reports and information.

Expo for inventive entrepreneurs

The British Invention Show is a useful exhibition showcasing new inventions from all over the world. It's attended by people looking for business or product ideas, as well as agents, manufacturers and other professionals. Innovations on display are also eligible to be entered into an awards contest judged by a panel of experts. The event is happening in North London on 18-21 October.

This plain English manual aims to demystify finance and financial jargon for small business owners. It covers how to work out how much money your venture needs, identifying options for raising cash, and choosing the best method of financing your business. It also includes detailed briefings covering how to finance a particular type of start up. Check out:

Raising Finance for your Business, by Mark Blayney

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Good luck

The EnterQuest Team

This information is meant as a starting point only. Whilst all reasonable efforts have been made, the publisher makes no warranties that the information is accurate and up-to-date and will not be responsible for any errors or omissions in the information nor any consequences of any errors or omissions. Professional advice should be sought where appropriate.