Top Ten Reason To Market Your Business Online

The Internet. The great leveling medium that makes a small business nearly as accessible as TheBigCorporation.com.
But many businesses throw up a site without much thought about the potential impact it can have their business.

Why should you have a web site? Why should your business be online?

These 10 reason will give you something to think ...

1. Greater Marketplace Expansion
   Boundaries are nonexistent and less restrictive. Making it easier to reach new customer markets both globally and locally.
2. The Internet Is A Great Market Research Tool Analyze competitors' web sites. Find data and analysis material for new markets. Receive customer feedback.
   Possibilities are endless.
3. Release Time Sensitive Materials Faster You can make information available anytime you want. Make changes on your web site instantly. Something you can't do with printed materials. You can send last minute sales announcements to your customers.
4. Make Information More Easily Available To Customers And Visitors. You can post your hours of availability. Put your brochures, catalogs etc. online. You can include a Frequently Asked Questions section. The Internet gives you the ability to add sound and/or video to your site.
5. Ability To Conduct Business 24 Hours
   Your web site works 24 hours a day, seven days a week advertising your business.
6. Test New Services And Products
   Since you can reach markets faster and quicker, you can test new idea, try a marketing campaign before rolling it out. You can know where to position your product or service in the marketplace.
7. Extremely Cost Effective
   It costs practically nothing to put a web site online.
   Putting brochures, newsletters, and catalogs online saves a fortune in printing and mailing cost. News Releases and media can be distributed over the Internet quicker and cheaper. You decrease administrative cost through online automation. Lower telecommunication cost.
8. Make Connections
   It's not what you know but who you know that opens business doors. Networking online is more time effective than meeting face-to-face. Online you can meet prospects and business colleagues anytime of the day or night. You can quickly build your reputation and credibility all from the comfort of your home .
9. Your Customers Are Online
   Consumers are getting online in record numbers and it increases every year. Online retail sales will grow by almost 25% this year, according to Forrester Research.
   Keep this in mind... people use the Internet to research their buying decisions.
10. Your Competitors Is Online
    The best reason of all to market online! Forget the "I'm a local business" mentality. I guarantee no matter what your business, one of your competitors is successfully using the Internet to market their business. Over 40 million people used the Internet last year looking for local information.

The Internet is not going away. How much potential business are you losing by ignoring this powerful marketing tool?

Tips - Tax and National Insurance consequences.

If you work in a business where customers pay tips for good service, the receipt of the tip is always related to your employment and therefore potentially taxable!

National Insurance is somewhat different.

If the tips are paid direct from the customer to employee, generally no national insurance is due.

If the employer collects and distributes the tips, national insurance will be due.

If the tips are pooled and passed to an intermediary (a "tronc master") to distribute to the staff, national insurance may be avoided if the employer takes no part in the distribution of the tips.

For employers the risks of ignoring their responsibilities to deduct tax and national insurance can be severe. If deductions were due and not paid on the due date, certainly by the end of the relevant tax year, then both employees and employers deductions become a liability for the employer. Interest and penalties may also be applied.

If you have concerns that you may not be applying correct procedures to the payment of tips in your business do call.

Husband and Wife Companies (including partners registered under the new Civil Partnership Act)

Arctic Systems Judgement

Some of you may have heard of this recent judgement in favour of the Inland Revenue regarding a husband and wife team who have been deemed to owe tax relating to their relative salaries and dividends and how they were declared on their tax returns.

Basically the husband was paid a salary below the market rate for the work he did in the business. This facilitated additional payments being made to his wife, in the form of salaries and dividends, which were excessive if commercial rates of remuneration were applied to their respective roles. The Revenue have powers to treat this excessive remuneration as belonging to the husband in this case, and to adjust their relative tax positions accordingly.

If you are a husband and wife team and wondering whether this will make a difference to you we must wait for a definitive judgement. This case may be taken to the Court of Appeal.

Certainly it would seem sensible to review cases where the underlying commercial value of respective remuneration packages, is out of sync with the salaries and dividends actually being taken. The judge in the recent case suggested that where a true market salary was being paid, then the Revenue would be unlikely to launch an investigation. But this whole concept of market salary raises more questions than it answers!

Please call if you have questions to ask on this topic, but do bear in mind that until the matter is finally settled in the courts we can only address unresolved interpretations of the law.

More on this as and when the possible appeal is decided.

Record Your Assets

If you're a small business owner, you probably know by now how important it is to efficiently manage your assets. This fact is most evident at tax time each year. Whether you're talking about cash or other physical assets, managing them doesn't have to be difficult.

The main thing you need to remember when dealing with your cash accounts and assets is that good book keeping and accounting practices will save you time and money in the long run. You need to keep exact track of income and spending, no matter how small or insignificant the dollar value may be. A few cents here and there can add up to hundreds of dollars in no time.

Following of a good accounting practice and asset management is extremely important, especially when you are required to submit tax to the government. There are numerous cases where small issues that appear insignificant come under the eye of scrutiny and can haunt you for years with the IRS on your back.

Good record keeping will also benefit you any time you need to apply for a loan or grant. You will have to know each of your assets and provide documentation and accurate records.
Besides securing the loan, these practices will also identify you as a responsible member of the business community.

Often, small business owners tend to overlook certain items, not realizing that they are actually assets. Anything worth money, or that can be sold, is considered an asset. For instance, most of us know that our computer equipment is an asset, but we may overlook the desk or even the chair we're sitting on. Take a look around and see if you've missed any assets in your reconciliation.

Managing and properly reporting your physical assets needs to take several things into account. One of these is depreciation. When we talk about cars, the concept of depreciation becomes very clear. When you buy a car brand new at $15,000 you can't expect to sell it five years later for the exact same price. As soon as car is driven off the lot it deprecates in value. Mileage, wear and tear, and any accidents also play a role in the depreciation of the car.
The same goes for almost anything else you may be considering an asset. Property is an exception to this rule and in many areas goes up in value.

Therefore, small businesses need to cater to depreciation in value of the office equipment and most other equipment that has been purchased when undertaking asset valuation and management. While this process sounds overwhelming, it actually is fairly easy when assisted with the required tools and guides.

The mature business market offers numerous software programs that can assist you with your asset management and book keeping. While most of these are heavily documented and are very user friendly, some assistance from a software expert can get you customized solutions too. However, when choosing to seek external assistance for your asset management and accounting, then the right choice would be a qualified CPA.

The main point to remember that asset management in small businesses is just as important as it is in large ones. Be sure to take this into consideration and document everything. You may end up paying a high price if you don't.

FSA under fire after Blair speech

The troubled Financial Services Authority has come under fresh attack after apparent criticism by Tony Blair.

Unfavourable comments by the Prime Minister have sparked controversy at a time when the regulator is under increasing pressure.

FSA chairman Callum McCarthy has written to Mr Blair asking him to back up claims he made in a recent speech that the actions of the regulator - which oversees mortgage, pension and insurance sales - were seen to be harming well-run businesses.

Mr Blair told the Institute for Public Policy Research - in a speech entitled 'Risk and the State' - that the FSA was "seen as hugely inhibiting of efficient business by perfectly respectable companies that have never defrauded anyone".

'Damaging'

Defending the remarks, Mr Blair's office stressed he was referring to perceptions of the FSA's actions and that his sole aim was to improve regulatory performance.

Downing Street was also at pains to point out that Mr Blair was not out of step with Chancellor Gordon Brown, who was instrumental in creating the FSA after Labour's 1997 election victory and recently described its performance as 'world class'.

However, the FSA believes the comments were damaging.

In his letter, Mr McCarthy said they harmed the regulator's ability "to support the principles of better regulation".

The current furore will soon die down but the debate over the powers of the UK's main financial services regulator - which some believe are too wide - is unlikely to subside.

There is growing scrutiny of how the FSA investigates cases of misconduct and mis-selling by the 30,000 financial services companies and 100,000 industry professionals it regulates.

Its enforcement procedures were criticised earlier this year after the Financial Services and Markets Tribunal ruled that a £1.1m fine handed down to Legal & General for mis-selling endowment mortgage policies was too high.

The penalty was subsequently cut to £575,000.

Review

The FSA is reviewing its investigatory procedures amid claims from insurers that some cases have not been sufficiently robust and that those accused of wrongdoing are not given adequate opportunity respond to or access evidence against them.

The Association of British Insurers, meanwhile, is preparing a dossier for the FSA outlining its members' wider concerns about the current regulatory requirements.

Gripes are expected to range from the escalating costs of complying with regulation to what some regard as inappropriate and unproductive guidelines which have no clear benefit to consumers.

The British Bankers Association - which represent clearing and investment banks - says that although it does have some differences of opinion with the FSA over specific regulation, it is supportive of its role.

"Our concerns are in areas such as the definition of regulations and the clarity of interpretation," said a BBA spokesman.

The FSA says it is addressing concerns about red tape, trying to identify what costs are solely attributable to FSA statutes, seeking to eliminate obsolete guidelines and finding alternatives to regulation.

"We are totally committed to the deregulatory agenda," an FSA spokesman told the BBC.

"We would be very concerned if there was any evidence that our regulation was harming businesses."

Wider powers

Some observers believe that the Prime Minister's criticism of the FSA was somewhat paradoxical.

"I can imagine someone running a insurance company complaining about the burden of regulation," says Ned Cazalet, an independent insurance analyst.

"But if Mr Blair does not like what is going on, then surely he can go and change it."

Mr Cazalet says the FSA was deliberately given wider powers as a "super-regulator" to ensure a tougher and more professional approach to financial supervision after the BCCI and Barings scandals of previous decades.

"The FSA is the creature of the current government, which came in determined to reform financial regulation.

"The FSA didn't just pop out of the bushes. Its remit is set by the Treasury."

Work In Progress (WIP) - new basis of valuation.

This issue is about to become a real thorn in the side of any business that invoices their customers based on a chargeable rate per hour. Even accountants will be affected by these changes!

Basically, new accounting regulations dictate that sales must now include work done not billed - valued on a sales basis and not on a cost basis. This will include all the unbilled chargeable time of staff and partners or directors. Strictly speaking this is not a work in progress adjustment but a sales adjustment. The most immediate effect is that in the year in which this adjustment first takes place firms will see an increase in profits, and therefore tax, due to a change in accounting policy. No more funds will be generated by the adjustment and cash flow will suffer as the extra tax bills become due for payment.

For professional practices carrying large unbilled time ledgers the extra tax charge could be significant. For example, if in the past a firm of solicitors has valued work in progress at cost (salary costs) say £100,000, the true sales value of this asset may be nearer £250,000. This would increase the taxable profits of the partnership by £150,000 in one year - for self-employed business owners this could cost an additional £60,000 of extra higher rate tax!

There will be a period of grace before this comes into effect as it will apply to accounting years ending after the 22 June 2005.

A number of practical problems arise:

• When do you introduce the change in valuation into your accounts?
• How big is the additional reserve and how is it calculated? Do you have the systems to cope with this?
• For partnerships, in what partnership profit sharing ratio is it to be apportioned?
• How big a tax bill is it going to create for this first year - a significant amount for most businesses, and needs planning.
• Clients need to take into account that the accounting information we will require for next year onwards will be on a different basis and also needs planning. Do you have the systems to cope?
• As this is a sales adjustment will you need to pay VAT on the total value of the new reserve? The answer for most businesses will be no. Fortunately as long as you can argue that you are providing a continuous service, then the tax point is date of payment or invoice date which ever comes first.

A number of possible mitigating solutions:

• If you have been undecided on the incorporation of your business, this may be the clincher! Companies with profits under £300,000 will only pay tax at 19%.
• If you have work done not billed at the end of the year maybe this is the opportunity to move to monthly billing? Invoice all chargeable hours at the end of your year and this will generate the cash to pay the additional tax.
• Possible spreading rules - the Inland Revenue may introduce rules that allow you to spread the tax cost over a number of years. As yet this is speculation although similar changes to the tax code in the past have included the right to pay over an extended period.

Remember to call us for advice on all the above points, whether you are a company, partnership or sole trader. If you bill your clients on a time basis it's time to start the planning process now!

The 3 Essential Factors for a Successful Internet Business

So you want to start an internet business? With all they hype and downright nonsense on the web these days it is easy to get totally confused. The end result is wasted days, weeks, months, and even years stuck in an analysis
paralysis: you are so busy reading the thousands of free ebooks, each of which is telling you that you can be rich overnight, that you end up making nothing at all - or worse still, making a loss.

So, to distill it right down, what DO you need for a successful internet business? I believe that it can be boiled down to three fundamental factors:

FACTOR ONE: the most important of them all, yet (for the
newbie) the most neglected. Yet it is this one factor, over all the rest, that will determine whether you are successful or not.

What is it? Napoleon Hill calls it a "Definite Chief Aim".
Unless you have a very clear goal of where you are headed and, with it, enough belief in yourself that you can make it, you will fail. It's as simple as that.

Everything you do, every success, and every failure, starts in the attitude of your mind. So, if you really want success, you had better start by getting your mind in shape.
Fortunately, that is easy to achieve - if you would just dedicate yourself to the task of self-improvement. Is it any surprise, then, that the more successful people are, the more they spend on self-improvement books, tapes, seminars, and coaching? Professionals get personal coaching, amateurs try to teach themselves.

If you want to be rich, then do as the rich do: invest in your eduction and personal development. Here is a good place to start: http://midas-secrets.com

FACTOR TWO: A clear and coherent business plan. "Yes, yes", everyone nods, yet how many people actually get around to drawing up a detailed, written plan? Why do you need one?
Because a business plan is the road map that shows you the route to take so as to arrive as quickly and efficiently as possible at your "definite chief aim".

Don't know how to go about drawing one up? For detailed help, why not go down to your local library and read some books on it? Or go to your bank's business advisor. In many countries the government has set up agencies with the specific remit of helping aspiring entrepreneurs to get started. Go speak to them.

But, just to give you a flavor, here are some crucial questions you need to be able to answer if your business is to succeed:

A) Who and where is your hungry crowd? It is no use trying to sell burgers to people who are just leaving a restaurant.
They are not hungry. If you want to sell something, your very first task, even before you decide what to sell, is to ask "what do people want"? If people are desperately hungry, they want to be filled, if they are dying of thirst, they want to be quenched, if caught in the rain, they want to be dry, and if feeling lonely, they want to be loved.
Get the general idea?

B) When you know what they want so much they would sell their own mother to get, your next question is "what product or service can you provide them that would meet their need or want?"

Be careful to distinguish between SOLUTIONS and PRODUCTS.
People caught in the rain don't want an umbrella, they want to be dry. People who are insecure don't want a fancy, expensive car, they want to be noticed, admired and envied.
The mother with a newborn does not want diapers - she wants her baby to be dry and comfortable.

The products are only the means to an end. Don't sell products, sell solutions. What solutions can you provide for your crowd with their desperate "wants"?

C) If you have identified your hungry crowd, and come up with some valuable solutions for them, how will you tell them what you can do for them? How will they find out that you have an answer for their problem? In other words, what will be your marketing strategy?

D) Finally, (and this really is at the END of the list, not the beginning) how will you deliver those solutions? Will you sell them a product, or a service? How will it be delivered? How will you collect the money? What infrastructure will you need to put in place before you can even start?

It is no use having hundreds of burgers sitting in your freezer at home when hordes of hungry fans come flooding through the football stadium gates at the end of the match.
You need to be there, in place, ready and waiting, with your Burger Van fully equipped with grill, paper plates, and cans of Coke - and, of course, a permit!

FACTOR THREE: The right tools for the job. Don't try to cook gourmet meals for a five-star hotel on a single-ring camping stove, it is not up to the job.

Everyone on the internet seems to want to run their business for free. The want free traffic, free email, free websites, free autoresponders, and free subscribers. Well, yes, you can make a bit of money online using free stuff. And maybe that is what you should do, while you are first finding your feet.

But if you are serious about your business, then at some point you going to have to get serious about your tools.
Professionals invest in quality tools because they make the job easier, quicker, and better. Amateurs try to make do with whatever they can find in the back of the shed. As a customer, which would you rather go to if you wanted your roof fixed, or your ears pierced?

The details vary, but take a look at every successful business and you will find all three factors solidly in place. Making money is not hard. Millions of ordinary people do it quite successfully. You just have to go about it the right way. Concentrate on these three factors, and you will be off to a flying start.

Pensions

The rules surrounding pensions will be changing significantly from 6 April 2006. The idea is to simplify existing rules and encourage people to save in their pensions. For some people these rule changes will be advantageous, for others not so. Whilst the fine detail of the changes is still being hammered out with the Inland Revenue the broad thrust of the changes is clear. For example, a major change is that residential property can be held in a pension. In many cases reviewing your pension, or setting up a scheme now, will allow you to take advantage of rules which will disappear after April 2006. If you would like to know more about this or understand how the changes will affect you please contact us for more information.

Bad Debts

With many commentators predicting a down turn in the economy, you may feel taht now is a good time to review the creditworthiness of your customers. Non payment of money owed can be devastating for a business. Simply checks, such as reviewing the register of outstanding invoices, can help avoid bad debts. Recent changes to the law mean that in many cases the cost of recovering monies due to you can be passed on to your customer making it more cost effective to pursue bad debts. If you would like more information on credit management or recovering bad debts please contact us.

Tax Investigations

The Inland Revenue have begun to send out tax investigation notices. They do not need to give a reason for making an enquiry, which includes a review of all your books and records, into your affairs. Anyone who completes a tax return (including private individuals) could be the subject of an enquiry. If you are one of the 11% of companies that have enquiries raised on them it is likely to involve you in significant cost both in time and fees. If you would like to insure yourself against the cost of an enquiry please contact us for more information.

Tax Diary June/July 2005

1 June 2005 - Due date for corporation tax due for the year ending 31 August 2004.

19 June 2005 - PAYE and NIC deductions due for month ending 5 June 2005. (If you pay your tax electronically the due date is 22 June 2005)

1 July 2005 - Due date for corporation tax due for the year ending 30 September 2004.

6 July 2005 - Ensure forms P11D(b), P9D and P11D are submitted to the Revenue.

19 July 2005 - PAYE and NIC deductions due for month ending 5 July 2005. (If you pay your tax electronically the due date is 22 July 2005)

19 July 2005 - Employers Class 1A National Insurance is due for payment, year to 5 April 2005

31 July 2005 - Second payment on account due for self-assessment tax 2004-2005.