Has your business got the potential to be a Franchise?

This question has been asked by a number of clients in recent months, so I thought I would share with you some insights into what is required if you are looking into this.

Questions to ask yourself.

Does your business make a reasonable profit?

Do your products or services meet a ready need in the market?

Could your business work in other locations?

Could others be trained to run a business in the same way as yours?

Are you keen to grow but concerned about losing key personnel?

Does it interest you to help others become successful in their own right?

Are you keen to grow whilst minimising the risk?

Are you keen to grow whilst minimising financial outlay?

Would you like to multiply your profits over the next few years?

Would you like to generate a substantial passive income stream?

If you are saying yes to most of these questions, then your business could have franchise potential. We have the contacts to hand who can assist you through this important phase.

Some of which are:-

Having a sound financial model with excellent documented processes will put you on the right road to make your business a viable option for others. Most networks look at a business being able to run at a turnover of more than £1,000,000 a year, as this has proven that the model is working and that you as owners are seeing success in your own right. That doesn’t mean that as a smaller business that this idea is pie in the sky, but it does make a difference on your selling price and advertising potential of the franchise.

We have found that by being able to at the push of the button knowing exactly where you are financially, you can plan for any number of opportunities. The important thing to remember is that whilst you are passionate about your product or service, others will follow suit. Keeping the motivation is a big part of these successful brands. Training and recruitment, and controlled growth and support. It doesn’t matter what type of industry either, we have seen the food industry, manufacturing and accountancy to name a few take on the franchise idea and make a big success. It is a faster way of getting your name out and improving branding and enables you to distribute on a national, multi national scale, and of course profitable. If you would like to hear more, come and book an appointment with us.

This blog is intended for information purposes only advice from past experiences, you may have your own suggestions.  It is not intended to be used for all of your business decisions, but used as a guide only.

Happy with our work?

Our clients have been very loyal by giving us some superb references since we began trading.  In fact, a good proportion of our clients have come via the referral route.

So, it’s time for us to give something back.

Refer us to others for a £40 discount on this year’s fee

As an existing client, if you refer us on to someone who becomes a client directly as a result of your referral, we’ll give you £40 discount on your fees* for that same year.

Refer two clients who sign up with us – and you’ll get double the discount. Three clients and triple – so if you recommend others to us regularly, who knows – you may never have to pay one of our invoices again.

Just make sure that they tell us that you sent them!

To find out more call Nicola on 029 2065 3995 or email her asking for more information.

*at referral invoicing point.

Your year end can cost you more than you think

Preparing your year end accounts can be costly your business – and that’s before you’ve event considered the financial aspect.

In finding, organising and making sense of your paperwork and records, there are time costs, emotional costs (usually stress!) and work-life balance costs to consider.

15% off your year end with us

Cross Accounting Services can help on all fronts. We love year end and so as a thank you from us, we’re offering 15% off your first year end fees with us.

So, you get to spend time doing the things you love at a reduced all round cost – and we get to spend time doing the things we love, thanks to you!

Call Nicola on 029 2065 3995 and quote reference CA15 to receive your discount or email her asking for more information also quoting CA15 Closing date 31 March 2014

The Art Of Cashflow Management

Point 1

Always be aware of what you have in the bank Account

Point 2

Put together a short term cashflow 3 months and a longer term one 12 months

To put together the cashflow statement

Sales Income Put all you known sales turnover from your diary into the forecast Unknown your new sales turnover, use last years figures to guide you, in the absence of last year, use a realistic sales turnover.
Don’t forget VAT and keep it separate, as this money belong to the Inland Revenue
Other Income ie bank interest, dividend, insurance refunds.

Costs Cost of Sales this can be based on your average margin percentage

Overhead costs

Fixed and variable

Ie rent, heating, salaries, office costs
Bank loans and capital
The VAT return and Paye

Point 3

Update this daily or weekly, with actual figures, this will allow you to see in advance how your cash is being spent, and also if you need to fund the business. Or used for Capital expenditure and taking on staff. It’s a great predictor for being able to do operation things.

Point 4

If you see a dip in funds, make sure you know in plenty of time, as a six week window may not be able to be filled, whereas a 3 to 6 month window you can plan ahead, and build up cash funds to cover you over the slower time.

Point 5

Use other sources to save on cashflow Gain credit with suppliers Get your capital expenditure leased, or obtain a bank loan. This will also improve your credit score. You score goes up, when you are able to get credit.

Point 6

Keep this on track at all times, even when you are in a cash rich, situation. You might be wasting your money on low interest schemes. Look at saving in other areas.

Let it be used against bringing your tax bill down, investments in EIS schemes, Pension contributions.
Further investment that will give a better return. Capital expenditure. Website development.

Self Employment Vs Employed

I get asked questions about subcontractors on a regular basis, so I thought I would share a few tips with you.

Employed

You will need to register for PAYE all employed staff regardless of the number of hours they work for you.    You need to keep personal information for example.  Name, address, national insurance, date of birth, hours worked and start and finish dates.   Keep a personnel file of any discussions or grievances too.

All employees require an employment contract, this can be simply done see the business link website for a template.

Business Link Template

Or you can use a registered HR Company to prepare one for you.

It describes the employee job title, description, hours of pay.  Rights to holiday entitlement, grievance procedures and sick and maternity leave.  Confirmation of start date and a job description, along with company rules and procedures.

You as the employer allocate work as required and set the hours of work to that employee, these are likely to consistent.  They do not have the responsibility of hiring or dismissing your staff.

You will need to keep employment records and records of salary paid, and you are responsible for their national insurance and income tax contributions.  You will also pay Employers National insurance on top of their salary, after the tax free allowances are taken into account.   Normally applying to full time time or part time after earning gross pay of £625 per calendar month. 2012/13 rates.

Self Employed or Contractors

Self employed staff or sub contractors are normally used on a temporary basis, the hours can be sporadic, and they have other customers besides yourself.

They would either be set up as a Limited Company, ie they are the employees of that company  or your supplier.   Or set up for self assessment.   They have the right to take or refuse a contract offered to them.  They also have the right hire and dismiss their own staff.

They have no entitlement to holiday pay, or sick pay through yourselves, or minimum wage.  But will normally charge for work done at their agreed hourly or fixed term rates.

They will either invoice you for the contract or have a deduction made on their fee through the CIS scheme.

The CIS scheme is a fairly simple scheme where you are either the contractor or the subcontractor, the contractor will deduct and pay over 20% of the subcontractors gross pay for income tax.  The subcontractor is responsible for their own national insurance.   There is a monthly submission required to tell the Inland Revenue what deductions have been made, and payment may be required.

Subcontractors can claim any overpaid deductions against their self assessment return, once a year.

A point to be wary of, any sub contractor that works only for you, and for more than six months will automatically be classed as an employee, once this time has elapsed and you will be responsible for their tax and national insurance.

If in any doubt contact the Inland Revenue helpline on 0845 900 0444

There are many case law studies, where this issue has become cloudy, and the sub-contractor has won the case, been able to sue the customer for lost holiday pay, sickness pay allowances.   Don’t let that be you.

This blog is intended for information purposes only and is only advice from past experience, you may have other suggestions of your own.  It is not intended to be used to make all of your business decisions but as a guide only.