Did you know that research suggests that 73% of business buyers say ‘No’ at least five times to any salesperson before they eventually say ‘Yes’?
The same researchers discovered that a staggering 92% of salespeople give up before they receive the fifth ‘No’ and move on to another target.
In other words, 92% of impatient salespeople rush from company to company chasing the 27% of sales where the buying decisions are made quickly. However, the other 8% of salespeople (the patient ones) are the only ones who stand a chance of winning the other 73% of sales!
Look at the maths and you’ll discover something that could give your business all the new customers and sales you can cope with! It’s called patience.
Get great new business leads by saying ‘no’ to bad opportunities
By Phil Ellerby
Winning new business is always a good feeling but is it always the right thing for your business? Are you saying yes when you should say no?
Here’s how to find out – ask yourself the following questions:
What is your vision for your business?
What is missing where you are now?
What needs to happen in order for your vision to become a reality?
The aim of following this process is to:
Develop a crystal clear vision of what you want your life to look like
Use your life vision to create the vision of what you want in your business
Make a list of what actions you need to take in order to go from where you are now to where you want to be
Take consistent actions toward your vision
Evaluate every new opportunity to determine if it moves you closer to your vision
It’s a BAD opportunity if:
You don’t feel good about the work you’d have to do
You wouldn’t be paid fairly
You don’t like the people you’d have to work with
It’s a GOOD opportunity if:
It gives you good experience but pays poorly
It pays well but doesn’t fit with your vision
You’d enjoy the type of work and pay but not the people you’d work with or place you’d do the work
It’s a GREAT opportunity if:
You love the work you’re doing
You get paid well for what you do
You feel inspired and invigorated by the people you’d work with and the place you’d do the work
Remember, when a client chooses to work with you, it does not make it a foregone conclusion that you will accept their request. You are in the driving seat. Use the system above to say NO to good opportunities … and YES to great ones! Happy opportunity hunting!
There are two main reasons why business owners need to be aware of the significant Flat Rate VAT changes for 2017:
You may need to pay HMRC more VAT
You could end up with a hefty VAT bill at a later date
This is why it’s important for anyone who owns a business to FULLY understand the complex Flat Rate Scheme (FRS) changes which came into effect from 1st April 2017.
To put it simply, any business using the Flat Rate Scheme but which actually spends very little on goods – including raw materials – could now have to pay more VAT. Why? Basically, the FRS has been altered (and the VAT rate increased to 16.5%) to stop businesses, and contractors in particular, from making healthy surpluses from the scheme – which HMRC feared was being abused.
The Flat Rate Scheme explained
The FRS was designed to simplify the recording of sales and purchases for small businesses and sole traders.
The VAT flat rate percentage which applies to you depends on the type of business you run.
The FRS let you calculate the total amount of VAT due by applying a fixed flat-rate percentage to gross turnover.
But, unlike standard VAT turnover, flat rate turnover takes into account business income (from sales) and the VAT paid on that income.
Since the changes were implemented on 1st April 2017, all businesses wanting to use the scheme must now work out if they qualify as a ‘limited costs’ business.
To meet the FRS requirements, the amount spent on relevant goods (including VAT) must be:
Less than 2% of VAT flat rate turnover in a prescribed accounting period
More than 2% of VAT flat rate turnover – but less than £1,000 a year
What are classed as ‘relevant goods’ by HMRC?
Various exclusions apply in order to prevent businesses making one-off purchases or buying low value everyday items or to inflate their costs beyond 2 per cent.
Goods MUST be used ONLY for the purpose of the business and DO NOT include:
Any services which are not goods
Capital expenditure – office equipment, PCs, laptops, mobile phones etc
Food and drink expenses
Gifts and donations
Goods you resell or hire out – unless it’s your main business activity
Rent, internet, phone bills
Training and memberships
Travel and accommodation expenses
Vehicle costs (including fuel) unless you are in the transport business
Who will the Flat Rate VAT changes 2017 affect?
There’s no getting away from the fact that firms who provide services, and labour-intensive businesses which spend little on goods, will pay more VAT.
Most consultants, IT contractors and construction workers – who supply their labour but do not buy the raw materials they use – will be affected.
Businesses which use the FRS, or are thinking of joining the scheme, must now think carefully about whether they are a ‘limited cost’ trader.
For businesses who purchase no goods, or those who make significant purchases, this will be obvious. Others must use their accounting information to complete a simple test and work out whether they should use the new 16.5% rate.
Businesses using the FRS will be expected to ensure that they use the appropriate flat rate percentage for each accounting period.
What should I do next?
Deciding whether to remain on the Flat Rate Scheme or move to a Standard VAT Scheme depends on your individual business circumstances – and your levels of capital expenditure.
For some businesses, it makes more sense to pay VAT via the standard accounting practice because they end up paying less.
To find out if you should be on the FRS – or if you want to know whether you should remain on it, take a close look at your trading activity and VAT levels.
Businesses can also work out if they are eligible to be a ‘limited cost’ business by using this free Flat Rate Changes 2017 tool from HMRC.
You can also use this HMRC guidance to discover the Flat Rate Scheme percentages that would apply to your company.
Be warned: Getting the Flat Rate VAT changes wrong could mean that a limited costs trader ends up paying out more than necessary!
If you don’t know what’s best for your business, you MUST seek professional advice!
Doing nothing is not an option. Otherwise you could get a nasty surprise when it comes to paying your VAT – especially if you do this annually!
We will happily advise you about whether it’s best to be on the standard VAT scheme or the FRS – if you require further help, please get in touch or call 0113 2189552 to arrange a free VAT consultation.
On the back of our recent update on the Small Business Bounce Back Loan, we provide details of another loan option, the Future Fund Scheme. This one is for high-growth tech start-up businesses facing financial challenges during COVID-19.
What is it
The Future Fund Scheme is based on the Government making available £250 million in total through the British Business Bank. These convertible loans range from £125,000 to £5 million in total.
Who is it aimed at
It is specifically for high growth tech start-ups, those who need financial support during COVID-19, and would normally rely on equity investment. Those who cannot access the Coronavirus Business Interruption Loan Scheme.
When is it launched
This is what we don’t know yet but the intention is it will be rolled out from May through to September 2020.
a) The company must be an unlisted UK registered company.
b) It must have raised at least £250,000 in private funding within the last 5 years.
c) It must have a sustained economic presence in the UK.
Future Fund Scheme conditions
a) The loan shall mature after a maximum period of 3 years.
b) The loan must be used only as working capital.
c) The interest will be set at a minimum of 8% and will be paid at the end of the loan term.
The interest rate shall be higher if a higher rate is agreed between the company and the matched investors.
d) Eligible companies must acquire private investment to match that of the Government
funding. Government investment will make up no more than 50% of the overall amount.
e) The Government shall have limited corporate governance rights during the term of the loan and as a shareholder if the loan is converted into shares.
f) If the loan is converted to shares the ‘most senior class of shares’ must be offered, comparable to the value of the loan.
If you are a high growth tech start-up this is a good one for you to be aware of. If you need further clarity, please get in touch on 0113 218 552.
Away from the challenges of COVID-19. something pretty special has been proven by the NA Family.
We could not be more proud of Northern Accountants’ clients and associates who helped us smash our fundraising target for Leeds Cares.
We set ourselves a target of £4000 for our nominated charity and hit over £5000 in less than 5 days. As donations dropped into our Just Giving page daily, it quite literally blew us away!
Here’s our story and why we wanted to support children and their families in Leeds Children’s Hospital. More importantly what the money we raised will buy
Northern Accountants launch business initiative for Leeds Children’s Hospital
The speed at which you responded, your generosity and support for this special cause means our donation is already helping children in their end of life care.
THANK YOU GUYS we could not have done it without you. And this is certainly not the end of our story with Leeds Cares.
Ahead of the release date, Wednesday 13th May, our CEO Phil Ellerby prepared Northern Accountants with an overview of what they need to do to access the Self Employed Income Support Scheme.
In the video, which landed with clients Monday 11th May, Phil recommends what businesses should do now to get ready for Wednesday’s application. He includes the criteria for eligibility and what details are needed to apply straight away.
Click on the link here to find the Self Employed Income Support Scheme video so you too can access the support our clients received.
You can also find the Eligibility Checker Phil refers to here.
To look back at all our Survive and Thrive videos you can access them here on our COVID-19 Response page here.
Alternatively our Business Tips page for blogs to help businesses with the financial challenges relating to the impact of coronavirus on business owners and directors here.
Since the outbreak of lockdown, we have devoted our tools and time to supporting Northern Accountants clients so their business stays in business. If you need help with any of the topics covered, please get in touch on 0113 218 9552. We are on a mission to help more businesses survive and thrive as well as maximise from the opportunities we strongly believe lie ahead.
The second of two emails sent to clients on Monday 11th May. This time CEO Phil Ellerby gives an update on the Small Business Bounce Back Loan.
The response from Northern Accountants to clients facing the financial impact of the coronavirus pandemic continues as we give video updates to ensure business owners and directors hear first hand the support available. Here Phil outlines his recommendations about SBBL’s and why all businesses should seriously consider applying.
The short and long term benefits are covered, all designed to give our clients an idea of how to keep cash flowing in the business to survive and thrive.
You can find Phil’s latest video on the Small Business Bounce Back Loan here.
Also, Phil mentions other videos as part of the NA Action Plan series Northern Accountants did for clients. This entailed daily actions to help the businesses we look after stay in business.
Click through and listen to the advice we gave our clients as the challenges and government announcements unfolded:
If you need help with any of the above or would like to talk about the updates this week on the Small Business Bounce Loan or the Self Employed Income Support Scheme, please get in touch on 0113 218 9552.