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Starting a new business in lockdown

Starting a new business in lockdown

When experienced project director Steve Harbertson lost his job amid the fallout of coronavirus, he turned to a long-held ambition of starting his own business.

Steve, who lives near York, was made redundant in March as the impact of social-distancing measures began to bite. Steve had been working for an established firm offering event production and audio visual expertise – a sector he has been involved in for more than a 15 years.

He said: “I was told I was being made redundant – statutory redundancy for someone who has worked for a company for less than two years meant I was left with no redundancy pay and one week’s notice. It was brutal but understandable given the uncertainty over both future business and government assistance. I enjoyed my time with the company but survival sometimes means that hard decisions must be made.

“I had decided though that this company was going to be the last that I worked for, however that worked out. I have a wife and three sons, so the regular income was welcome, but I had always been ready to start my own business – it’s just happened a little sooner than expected.”

Steve, pictured, was able to quickly establish his new venture, Swift AV Solutions Ltd, which has a list of services for clients including web streaming, video conferencing and audio visual equipment rental / production management for corporate events, award shows and product launches.

He said: “A lot was already in place – I had a website ready to go, for example. I can market myself and lay the groundwork for when business returns to a level of normality. With strategic partners built up over my years in the industry we can offer everything that a large production company does.”

Steve believes there are opportunities for collaboration among smaller businesses.

He said: “I think small businesses will have an edge and I think there’s an opportunity for small and medium-sized business to work together more. If staff are furloughed, for instance, firms could turn to experienced freelancers like myself in certain situations in order to keep their business going.”

Looking for guidance on how to start a new business? You can read our guide here.

Free online trading offer for businesses

Free online trading offer for businesses

Businesses in North Yorkshire are being offered free subscriptions to a shopping website to help them trade during the Covid-19 crisis.

The York & North Yorkshire Growth Hub has invested in a community led shopping platform, ShopAppy.com, allowing local businesses to have free 12-month subscriptions to the site. Launching today (Monday 18 May), it’s targeting businesses from 10 towns in the area who will be able to access the free offer.

York & North Yorkshire Growth Hub is funded by government and coordinated by the York & North Yorkshire Local Enterprise Partnership.

Richard Shaw, Chair of the Business Board at York & North Yorkshire Local Enterprise Partnership, said: “We’re not likely to see a return to pre-lockdown shopping habits for quite some time, but we think ShopAppy.com can really help businesses and shoppers right now. Businesses that can’t trade as they used to can get set up on ShopAppy.com with limited technical know-how and without the cost of building and promoting their own standalone store. Goods can be delivered by local delivery partners or collected in a way that complies with social distancing rules. We think this will appeal to businesses of all sizes and will also include services that can provide online events and activities as well as hairdressers and beauticians who can sell their products or provide buy now, use later vouchers to help them through the crisis.

“York & North Yorkshire Growth Hub has made this investment as we feel this can help businesses operate, and that could be the difference between surviving the Covid-19 crisis or having to close.”

Shoppers will start to see a wide range of shops and services on the site as businesses from North Yorkshire join. The initial 10 towns covered by the free subscription are: Selby, Harrogate, Knaresborough, Settle, Malton & Norton, Easingwold, Richmond, Stokesley, Catterick and Thirsk.

Richard added: “Consumers will see a convenient and easy to use a channel through which they can support their high streets and markets and the local community now and in the future. This will have a positive impact on the local economy, preserve the high street and rural enterprises, and build community connections. It will also assist with creating resilience by giving businesses an alternative operating model, so they can continue trading should they have to close their premises again in the future.”

Support will be offered by the Growth Hub to help firms get started on ShopAppy.com and advise on areas such as marketing and adapting business models. The Growth Hub will also offer help to build local networks in support of delivery options for businesses.

ShopAppy.com is a social enterprise and a support local campaign founded in 2016 which aims to “revive British high streets”.  

Jackie Mulligan, pictured, Founder of ShopAppy.com, said “We are delighted to be working to help towns and communities at this time and to be partnering with the LEP on this. With our recently announced partnership with Visa helping us provide support to more small businesses across the UK, we are certain that this will provide a real and tangible benefit to North Yorkshire businesses and the community.”

Sue Thompson, Founder of award winning business network group Thirsty Thursday Stokesley, said: “The introduction of the ShopAppy platform to Stokesley will be of great interest to our businesses and service providers. Any kind of support that is offered at this difficult time to revive our high street will be welcomed and will no doubt generate interest from customers both within Stokesley and further afield. We have a great range of independent shops and businesses and it is a great place to shop, relax and enjoy the Gateway to the North York Moors.  We will look forward to showcasing it in Stokesley.”

Businesses interested in taking up the free offer can find out more here.



Free Covid-19 webinar: Managing cash flow in a crisis

Free Covid-19 webinar: Managing cash flow in a crisis

A free, 45-minute webinar offering business support takes place on Tuesday 12 May.

The York & North Yorkshire Growth Hub has teamed up with the Institute of Chartered Accountants in England and Wales (ICAEW) to give practical advice about how businesses can manage cash during the coronavirus crisis, as well as put systems in place for the future.

The webinar, which runs from 12.15pm – 1pm, will cover:

  • Strategies for effective cash flow management in a time of crisis from chartered accountant Tom Bottomley, an ICAEW member
  • The free support and mentorship that businesses can access from David Ryden, Programme Manager at the growth hub
  • There will also be the opportunity to ask any questions during the session.

Andrew Raby, York & North Yorkshire Growth Hub Manager, said: “Businesses across York and North Yorkshire have felt a deep impact from the coronavirus crisis and cash flow is a big concern for many. Join us for this free webinar aimed at helping businesses to manage their cash effectively through the current crisis and beyond.”

The webinar will be on Zoom. To book a place, visit our event page

KeepSafe launch helped by the Growth Hub

KeepSafe launch helped by the Growth Hub

The York & North Yorkshire Growth Hub has worked with an engineering firm to help them launch an innovative new product.

A team of engineers at Sylatech stepped away from their usual projects and focussed on a new Coronavirus-related challenge. The firm has launched a personal handheld device called the KeepSafe, which enables users to avoid touching handles, buttons or grabbing items unnecessarily.  The firm, based in Kirkbymoorside, is now selling the device and also aims to donate 20,000 KeepSafe’s to NHS and key workers in North Yorkshire.    

The KeepSafe is manufactured from a copper-based alloy, chosen for its anti-microbial properties.

York & North Yorkshire Growth Hub has assisted Sylatech for more than year, working with the firm to explore ways of growing the business. As lockdown came into force, the focus turned to supporting the rapid turnaround of the KeepSafe.

Andrew Raby, York & North Yorkshire Growth Hub Manager, said: “The Growth Hub helped Sylatech achieve their first orders and put them in touch with potential clients and funding sources. We’re keen to support this because the product helps to protect frontline staff against the Coronavirus threat, as well as potentially securing manufacturing jobs and enabling good growth for the business. It’s an example of the sort of support our growth hub can provide. We’re here for businesses of all sizes in York and North Yorkshire, providing free and impartial support to help drive growth, even in these challenging times. We invite firms to get in touch with us.”

For more on the KeepSafe, click here.

The pros and cons of business grant funding and loans

The pros and cons of business grant funding and loans

Introduction

Every business needs a bit of extra help sometimes, particularly when it comes to finance. Having extra cash flow or a contribution towards a project can help you bring in new equipment, hire employees, and develop your business, so it’s good to know what options are out there!

This article will cover the two main kinds of funding you can explore – grant funding and loan funding – and how they might be able to work for your business. There are also various forms of alternative finance, such as peer to peer (P2P) lending.

Grant funding

When people think of business funding, they’re likely to be thinking of a business grant. Grants offer a sum of money towards the total cost of a project, and this money does not have to be repaid. They’re often funded by Government initiatives, so target certain types of businesses and projects to help enable growth in these areas.

Grants are generally retroactive, meaning that you agree your project ahead of time with the agency, complete your project, and the amount agreed upon is repaid after the project is completed. This is both an anti-fraud measure and a way of the agency controlling the amount of funding they release.

Unfortunately, consumer businesses and start-ups are often ineligible from grant funding due to the competition in these sectors. However, new schemes open on a regular basis, so it’s always worth getting in touch with the Growth Hub to see what might be available!

Pros

  • The biggest pro of grant funding is that the money you receive does not have to be repaid – this contribution can help you save money on your project, or enable spend in other areas
  • As funding projects are targeted towards certain initiatives, they can encourage you to develop areas of your business you might not have considered, such as employing a consultant, or examining your environmental impact. These projects can help make businesses more efficient, better for the planet, and explore new angles for your company.

Cons

  • Grants only offer a percentage of the cost of your project – generally between 10-30%, though some grants can be as high as 50%. You are responsible for sourcing the rest of the funding needed to complete the project.
  • Start-up businesses are often excluded from grant support. Grants are usually funded by taxpayer money, so agencies need to ensure that the projects they fund offer good value for money, and that’s difficult for them to gauge when your business doesn’t have a track record. Most grants will consider start-ups from two years of trading.
  • Grants can be highly competitive – everyone loves a bit of free money, after all! Your project needs to represent great value for money, and match well with the priorities of the grant.
  • Grants are restrictive with what they cover, and are often only available for two purposes; the purchase of equipment (capital funding) or consultancy, which includes research and development (R&D) projects (known as revenue funding). They can’t be used for marketing or working capital for your business.
  • Grants are often conditional – they’re to support business growth, meaning that you often need to agree to create jobs at a rate set by the grant provider, or may have to agree to pay the Real Living Wage, hire from underrepresented groups, or reduce your carbon emissions.

Loan funding

Loan funding is often viewed less favourably; however, it can be a great opportunity for your business. Loans are often provided by non-profits, community groups or charities, and offer large sums of money, which could be enough to cover your whole project, upfront. They can also be used in partnership with grant support to help you with your development.

Almost every business sector can access loan funding, as the repayable nature of the funding means it can be a lot more flexible. However, as with every loan, that money does need to be repaid and often with an interest rate.

Pros

  • As stated above, some loans can offer enough to cover your entire project cost, and amounts can be as little as £500. This means that you can borrow as much or as little as you need to, and the loan agency will never advise that you take out more than you could reasonably be expected to pay back.
  • The loan programmes we advise businesses to consider are all non-profits. Their loans are generally unsecured, meaning you aren’t laying collateral (like a house or car) against your loan.
  • Unlike a bank, agencies like the Business Enterprise Fund aren’t trying to make a profit, so whilst they do charge an interest rate, this is just to ensure that they can keep the service running and have a good amount of capital to lend out. These interest rates tend to be fixed, meaning they won’t increase over the period of your loan, so you can always calculate your repayment.
  • Loan funding can be used for almost anything in the business, including things that grants won’t cover, such as marketing or office equipment. It can also be used as working capital, to allow a business better cash flow.
  • Business loans aren’t limited by sector – even consumer businesses, such as cafés and retail outlets can access them, despite being generally excluded from grant opportunities.

Cons

  • The biggest con of a business loan is that whatever you borrow, you have to be prepared to pay back, generally with added interest. This can put a financial strain on a business, particularly small consumer businesses and start-ups.
  • Interest rates with some loan schemes can be much higher than a business loan from your bank – this is due to the loans being unsecured. Businesses who have a good relationship with their banks may find going directly to their bank manager better-value than a loan scheme.
  • Like any loan, you can be refused for a business loan, particularly if you have previously declared bankruptcy or are facing financial difficulties.

Both forms of funding have their benefits and drawbacks, and it’s always best to explore your options by contacting your local Growth Hub. But if you need a bit of extra cash flow, you don’t need to feel stuck – there’s always schemes available!

Leaving the EU: 10 actions to prepare your business

Leaving the EU: 10 actions to prepare your business

Introduction

The UK left the EU on 31st January 2020, and there is now a transition period until the end of 2020 while the UK and EU negotiate withdrawal arrangements. During the transition period, current rules and regulations on things like trade, travel and business will continue to apply. However, new rules will take effect on 1st January 2021.

This article will take you through what your business needs to consider to be better equipped to deal with the upcoming changes.

Plan to be flexible

Leaving the EU is causing a level of uncertainty in the political and economic landscape which are forecasted to stay around for a while. Whilst it’s imperative to stay on top of updates, SMEs do have the advantage of being more adaptable than larger organisations, due to the nature of having a smaller workforce and smaller-scale operations.   

Remain alert to guidance that’s available. The gov.uk website, trade associations and professional bodies can all provide essential advice to steer you in the right direction as you navigate changes in your business.

It’s a good idea to elect a senior member of your business to be responsible for monitoring EU Exit updates, making sure they have good access to professional advice. This way, your business can be well-informed of any important updates and changes. Responsive planning is key at this stage.

Reassure your customers

It’s not just business owners who are anticipating the UK leaving the EU; customers are also considering how it will impact them.

Your customers could be concerned that you may not be able to supply them in the same timely manner, or that your prices may be affected. Reassure your customers that you are planning ahead to mitigate any risks; this may even increase your customers’ confidence in your business.

Prepare for impacts on your people

There are likely to be changes to employment regulations for non-UK EU employees. If you have any in your business, they may need reassurance to keep them in post.

Keep them fully up-to-date, and review your recruitment plan for any potential risks brought about by leaving the EU. It’s also a good idea to consider how your business will attract the right talent in the post-EU labour market.

The UK Settlement Scheme for EU workers is now open and available to take registrations.

Assess the risks in your supply chain

Negotiations may result in changes to tariffs on goods entering the UK from the EU, the speed of goods coming through the boarder, VAT, and the administration of moving goods. There also may be changes in the way goods move in and out of Northern Ireland.

By understanding the possible changes in your supply chain, you will be able to assess any risks and start to form a plan. It could be a good idea to consider contingency suppliers and to review stock levels. Could you look to source locally?

Review your contracts

Leaving the EU will mean that UK business contracts may no longer be subject to common EU law. In addition, as the UK withdraws from the EU legal system, contracts that have been negotiated prior to the EU referendum may need reviewing.

Review the contracts you have in place, look to renegotiate any potential negative impacts, and engage with your legal advisor to discuss any adjustments that may need to be made for future contracts.

Review your current trade data

It is critical that your trade data is accurate to help with changes in border controls. Ensure that your business has an Economic Operator Registration and Identification (EORI) number if you clear goods through UK customs or move goods in or out of the UK.

It’s a good idea to prepare and classify your trade data to ensure compliance with likely regulations.

Build your systems to capture the right trade data

When moving goods across EU borders after we leave the EU, data on the country of origin and value of goods will be required if there is no agreement around free trade. As a result, customs clearance declarations will be more extensive and more information about the goods being moved will be required.

Take time to scope out what additional data may be needed and adapt your ERP (Enterprise Resource Planning) system around the process changes.

Investigate existing government schemes

Businesses that have traded outside the EU are used to using government backed schemes such as ‘Trusted Trader’. This is a scheme where logistics and freight forwarders have Authorised Economic Operator (AEO) status, allowing them priority at border controls, accelerated customs treatment and lower safety control compliance.

Look at current initiatives like the ‘Trusted Trader’ scheme and warehousing and how your business can benefit when moving goods in and out of the EU. Also, consider registration or using a partner that has AEO status.

Prepare for currency volatility

The months following the EU referendum saw significant currency volatility and Sterling (£) lost value. Historically, currency fluctuates when there is political and economic uncertainty.

When Sterling is lower in value against the Euro and Dollar, your exports may look more attractive to your overseas customers. Financial planning, when there are swings in currency values, can be difficult and making wrong estimates can be commercially damaging.

There are finance products and options that can limit your risk, such as currency spot rates and forward contracts. Having pre-agreed exchange rates may add extra cost to your financial plan, but it may help to reduce your risk. Engage with your accountant, bank and currency specialists to look at products and processes to lower your exposure to currency exchange fluctuations.

Engage with your key business partners

As well as your supply chain, there may be other third parties who play a crucial role in your business. Banks, insurers and systems providers can all have a critical impact on your business, especially where they are also adjusting to their own challenges.

This is a key time to share information, share best practice and invest in developments together. Scenario planning and deployment of plans as a network can help share any burden. When trading in a disrupted market, consider joint ventures and cooperative approaches; there is a chance to be stronger together.

Summary

It is always best to be prepared. Keep your business up-to-date on information provided by gov.uk and professional bodies, speak to professionals such as legal advisors, banks and insurers, review your current operations, look out for your non-UK EU employees, and always make a plan. It’s imperative to keep on top of any changes to make the EU Exit transition as smooth as possible for your business.

For more information, helpful links and sector-specific support, check out our Growth Hub page dedicated to EU Exit advice. Thanks to PriceWaterhouse and the Manchester Growth Hub for providing supporting information.

Innovative cost saving ideas for your business

Innovative cost saving ideas for your business

Introduction

Innovation does not have necessarily have to involve a massive change to your business, such as a launching a new product launch, changing your service offer, or implementing major adaptations to the production line. Smaller innovations that improve some part of your business can have an equally long-lasting effect on your business – especially if you focus on cost saving ideas.

When talking about innovation, people tend to focus on things being brand new, and never seen before in the market. However, that is not necessarily the case. If a product, service or process is new to your business, then that is an innovation. You do not necessarily need to have had the idea yourself, as long as it is something that new to your business. For example, if another business has developed a more efficient way of producing a similar product to yours, you could learn from their methods and adapt it to your processes.

There are lots of ways that you can bring innovative cost saving ideas in to your business, and the best place to start is to look at the types of waste your business is producing. By looking at what you are throwing away, you can often come up with new solutions to convert them in to something profitable, or to increase efficiency.

Turn waste in to profit

Anything that is wasted in a business is an additional cost, especially if you are having to pay to have it sent to a landfill site. It is highly unlikely you will be able to eliminate all waste from your business, but it is likely that you will be able to convert some of what you are wasting in to something commercially viable.

There is a big market for different types of fuels, and if your business is producing a lot of food, wood or cardboard, or agricultural waste, it could be possible — with some innovative thinking — to convert that in to some kind of bio-fuel. You can then sell this by-product, rather than having to pay to have it taken away. This means that you are not only cutting costs, you could be actively making a profit. Further, it is more sustainable option for your business.

Increase your efficiency

Sometimes, it is necessary to spend a little to save a lot. If the way you manufacture your products or deliver your services is outdated, it is likely that you are not as efficient as you could be.

Innovations in processes to increase your efficiency or streamline your service can save your money in the long term. You can identify parts of your production or service that take the most time to achieve and see whether you can implement a change that reduces it.

Remove features that your customers do not use

If you offer a product or service that has lots of different functions within it, take some time to evaluate whether or not it is actually adding value to your customers. There is no point continuing to develop something that people do not use or want to buy.

Take a look at the reviews of your businesses and see what consumers are saying, or conduct a market test to get some direct feedback. If there is something they love, develop it further and see if you can increase its value, but if there is something that your customers do not like or do not find useful, take it out. For tips on how to conduct a market test for your business, click here for advice written by one of our experts.