Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Getting support to raise your game | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Choosing an online marketplace | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
5 start-up lessons from 2020 | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Learning resilience from lobsters | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Preparing for business exit in 2021 | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Managing Covid-19 debt | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Starting a business in the pandemic | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Funding for female founders | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Reintegrating staff | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
5 signs it’s time to sell | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Should you invest now? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
The mental health challenge | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
When you return to the office | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Is your buyer serious? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Investment in the ‘new normal’ | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Productivity and the pandemic | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Reacting to unsolicited offers | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Adapting to the new environment | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
5 steps to scaling up fast | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Funding in the age of Covid-19 | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Learning from the financial crisis | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Recruiting remote workers | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Thriving through a recession | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Is your office too big? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Marketing through a crisis | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Staying on course | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Back to work | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Winning business at a social distance | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Thriving after lockdown | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Covid-19: through investors’ eyes | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
How to exit in 2020 | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Get virtual advice for Covid-19 | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Protecting your wealth | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Cash in a time of crisis | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Bouncing back fast | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Key tools for remote working | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
COVID 19 – Business Owners’ Advisory Service | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Covid-19: get the help you need | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Exit during a pandemic | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Making the most of alternative finance | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Start-up loans - the ‘bots’ have arrived | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Entrepreneurs’ Relief changes from £10 million to £1 million | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Growing by winning procurement contracts | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Five ways to benefit from a growth market | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Make your business more attractive | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
How’s your poker face? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Investment bonanza | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Help… we’re scaling up! | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Six steps to boost productivity | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Crunch time for Entrepreneurs’ Relief? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
How to prepare to sell your business when it’s dependent on you | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Five things you need to know | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Seven rules for hiring employees | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Five reasons loans are declined | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Starting over | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Have you protected your IP? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Navigating to exit in uncertain times | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Raising money to expand | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
How to keep cash flowing | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Lacking interest? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Selling your business to employees | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
The opportunities of private equity | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Skills shortages – what’s the risk? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Do corporates want your start-up? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
The bespoke approach to borrowing | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Don’t cook the books! | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Entrepreneurs’ Relief – which way now? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Should you sell up? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
When a key shareholder departs | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Securing a start-up loan | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Be prepared for an offer | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Finding cutting-edge expertise | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Five ways to find early adopters | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
15 facts about extracting capital | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Do you know your SPOFs? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
11 tips for perfect pitch presentations | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Entrepreneurs’ Relief: how it affects you | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Are you a credible founder? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
How to nurture clients | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Is your business your pension? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Could you get R&D tax credit? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Challenging the corporate bullies | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Ten changes to make at £1m turnover | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Five things affecting exit valuation | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Playing the long game | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Attack of the cyber criminals | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Borrowing from friends and family | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Should you start again? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Breaking down the barriers | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
When is the right age to sell your business and retire? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
How to recruit and retain top talent | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
It’s about culture | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Volatility is here to stay | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Should you save or invest? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Five things overseas customers hate | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
How to fund your success | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Crowdfunding – the new normal? | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Over the line | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started
Going concern | St. James’s Place - Entrepreneur Club

Important notice

Although the content of this article was correct at the time of writing, the accuracy of the information should not be relied upon, as it may have been subject to subsequent tax, legislative or event changes.


Getting Started

Capital gains tax under review

The government is considering a report that suggests a big increase in the tax may be needed

Capital gains tax under review

Chancellor Rishi Sunak is considering a report1 which says that dramatically increasing capital gains tax could make it simpler and fairer. Although no decision has yet been taken, a worst-case scenario for additional rate tax paying entrepreneurs could see some of those who currently qualify for Business Asset Disposal Relief facing a CGT rise from 10% to 45%.

In the face of the report from the Office of Tax Simplification (OTS) it’s important that you begin careful tax planning to ensure you don’t pay more tax than is necessary.  There is a variety of measures you can take, from changing your remuneration strategy to a partial sale but a strategy tailored to your needs requires expert advice.

The report suggests aligning CGT more closely to income tax. Basic-rate taxpayers currently pay 10% CGT on assets and 18% on property, while higher-rate taxpayers are charged 20% on assets and 28% on property. These rates are considerably lower than income tax, which is charged at rates of 20%, 40% and 45%.

Simon Martin, Regional Technical Manager at St. James’s Place, says: “Currently, if you sell a business for £1 million, as long as it qualifies for Business Asset Disposal Relief you pay a maximum £100,000 in CGT. But if you’re an additional rate taxpayer and CGT is aligned with income tax, you’d pay £450,000, so it could be a significant increase.”

Slashing the exemption

The OTS has also suggested reducing the annual CGT exemption from £12,300 to around £5,000 and reassessing Business Asset Disposal Relief and Investors’ Relief, which it says are not working as an incentivise for investment. The report also looks at the way CGT and inheritance tax work together, and in particular the CGT benefit someone receives when they inherit an asset.

Simon says that if you are planning for a business exit in the near term  ensuring you qualify for Business Asset Disposal Relief will help limit your CGT liability. If you’re close to a sale, getting the deal done before any CGT changes would also be prudent, he says. Alternatively,  When you plan to continue your business for the medium to long term, CGT changes alone may not push you to dramatically change your exit timescales. However, other planning such as pension contributions and an efficient remuneration strategy can help the ultimate CGT position by extracting capital from the business over time. 

A St. James's Place Partner will be able to help you develop an overarching  financial plan that encompasses both your personal and business assets. Taking advantage of your annual CGT exemption, which currently stands at £12,300 (£24,600 for a couple), could play an important part in limiting your overall CGT liability. And a St. James's Place Partner could help you use your dividend and savings allowances.

Tax-efficient remuneration

It’s also important to ensure that you have a tax-efficient remuneration structure within your company. This involves more than simply taking the maximum £50,000 a year in dividends to stay within the 7.5% tax bracket. You could, for example, give your spouse a 50% shareholding so that he/she can also withdraw dividends at the lower tax rate and help to reduce your CGT liability over time. Maximising your pension contribution is also a useful way of removing capital from your business.

More fundamental approaches could include simply holding on to your business and growing it further to limit the impact of any tax charge. A share buy-back could also form part of your strategy but this is highly specialised tax planning and you would need expert advice. Alternatively, you could consider a partial sale that could see you taking some money from the business at the current CGT rate and planning longer term for the rest.

Nigel Fox, an adviser at business growth consultants Elephants Child says: “There’s always a middle ground. Do you sell 25% of your business today, take some money off the table, accept the tax that you pay and continue to build either as an executive or just as a shareholder? Ultimately, when you come to retire, you sell the rest, accept that there is some tax to pay but you might have been able to put in some inheritance tax planning or structure around trusts that will minimise it at that point.”

Crystalising losses

Nigel also suggests crystalising any capital losses to offset against your capital gains. For example, if you have shares that have fallen in value you may be able to offset these against your tax charge when you exit.

“How you plan your taxes is entirely down to your personal circumstances, your personal risk appetite, your situation in life and what you want to do,” says Nigel. “What I would say is the devil is in the detail. Until you know the detail of what any legislation says, it’s difficult to make those plans.”

If you would like help with tax planning, talk to your St. James’s Place Partner.


The levels and bases of taxation, and reliefs from taxation, can change at any time and are dependent on individual circumstances.

Exit strategies may include the referral to a service that is separate and distinct to those offered by St. James’s Place.
The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.

1 OTS Capital Gains Tax Review: Simplifying by design, 11 November 2020

Getting support to raise your game

We take a look at some government-backed schemes designed to make SMEs more competitive and resilient amid economic uncertainty

Getting support to raise your game

The government has provided many valuable financial support measures to help firms weather the storm of the pandemic, ranging from furlough to CBILs loans. But businesses cannot afford to just take the money, hunker down and wait for pandemic-driven economic uncertainty to pass, argues Martin Brown of leading business growth advisers Elephants Child.

“Enterprises must be pro-active and agile to remain competitive and resilient,“ he says. “One way to start is to take advantage of government-funded training schemes designed to make companies better able to compete within their own markets or pivot to new ones.”

Leading the way

A relatively new and government scheme worth considering is the Small Business Leadership Programme (SBLP), designed for companies with two to 249 employees. Delivered via 20 leading Business Schools, the free 10-week programme is designed to help businesses deal with the impact of Covid-19 while developing their productivity and long-term growth potential.

Two senior managers from each company take part in interactive weekly webinars and peer-to-peer sessions and receive personalised support from a range of business school experts covering areas including HR, operations and supply chains, productivity and profitability, sustainability and how to be more resilient.

Driving performance

Jane Pallister, Entrepreneur in Residence at Staffordshire University Business School, manages the SBLP scheme for Staffordshire and beyond. She says: “The programme removes senior managers' feeling of isolation in dealing with the commercial impact of the pandemic and consolidates steps they’re already taking. 

“We share new marketing, finance, operations and employee engagement models to drive performance and productivity, while also focusing on employee support and wellbeing. We’re currently recruiting for the next cohort, due to start in January 2021.” 

Participant Kevin O’Mara, Managing Director of Staffordshire-based specialist executive chauffeuring business, Advanced Journey Chauffeuring, says the scheme has been a lifeline.

He explains: “We were losing revenue and visibility through the pandemic but the course inspired us to launch a communications exercise to let our customers know we were back in action and the steps we’d taken to ensure Covid-safe travel, and really put ourselves ‘out there’ on social media platforms and virtual business marketing groups. 

“As a result, we’ve attracted major new corporate clients who’d lost their incumbent service-providers through Covid-19. We couldn’t have turned things around without the help, expert advice and support we received to navigate us through some critical decision making.”

Peer networks

Another programme designed to strengthen businesses is peernetworks.co.uk, which brings together small groups of SME business owners across the UK to collaboratively develop solutions to common business challenges, such as EU transition, recovering from Covid-19, HR, technology and finance.

Led by the UK’s 38 Local Enterprise Partnerships, Peer Networks is free to join and offers access to one-to-one mentoring, coaching and advice, with each group led by a skilled professional facilitator. Martin says: “It provides the benefits of group learning in a collegiate and non-intimidating environment, offering the benefits of knowledge-sharing and being in a team to examine business, culture and related personal issues in a pragmatic way.”

It’s also worth taking a look at the government-supported Recovery Advice for Business Service run by Enterprise Nation, which gives SMEs access to business advisers and experts on business topics across all sectors to help them bounce back from the pandemic.

Get advice

Summing up, Martin says: “The highlighted examples are just a taste of what is available – but trying to make sense of the bewildering choice of state funded and private options out there is a challenging and time-consuming task.”

Before making any decisions, speak to your St. James’s Place Partner who will work with Entrepreneur Club to find the most appropriate provider for you.


Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.

Choosing an online marketplace

Online marketplaces can be a fast-track route to grow sales. But meticulous planning and execution is essential for success

Choosing an online marketplace

Marketplaces such as Amazon, eBay, or Etsy can be lucrative sales channels for SMEs. Andy Geldman, founder of Web Retailer, a website dedicated to providing information and research about marketplaces, says the primary benefit is the huge number of serious buyers on these websites which provide ‘ready-made’ large audiences to tap into. 

Research by ChannelAdvisor conducted in August 2020 actually shows that since the outbreak of Covid-19, 58% of UK consumers who have purchased online, discovered those products by browsing marketplaces – higher than any other method of finding products (such as brand or retailer websites, search engines or social media) .  

It is also relatively easy for businesses to get up and running, and what Andy has found is that being on a marketplace is often a trigger to start selling internationally. He says: “If businesses start selling on an Amazon or eBay in the UK, they will quickly realise that adding countries to that sales channel – using these same marketplaces – is not that big a leap.”

But, says Andy, it’s not all upside: “With large marketplaces comes lots of competition. This is ultimately why they are so successful. They are pitting sellers against each other to compete on price (primarily), but also on service and quality of information. It can be really difficult and expensive to stand out, particularly if you don’t have a recognised brand.”

Sifting through the options

“There are plenty of online marketplaces, but that doesn’t mean there are plenty of strong marketplaces. And they won’t all be appropriate for your business. It takes a lot of careful thought and planning to select the right one(s) for you.” says Andy. In fact, Web Retailer recently published an article reviewing the top 17 online marketplaces for selling to UK customers.   

He says for most businesses targeting UK customers, Amazon and eBay are the obvious choices, simply because they sell such a wide product range and because of their size. Amazon has more than 20 times, and eBay more than 10 times, the number of website visits than Etsy, the third most popular marketplace in the UK . 

Outside of the ‘big 2’, most marketplaces could be described as semi-niche or niche. Etsy and Notonthehighstreet have an emphasis on arts, crafts, and gifts. Then there are category-specific niche marketplaces such as Wayfair (homewares), Game (e-gaming) or Zalando (fashion).

For businesses interested in exporting, Andy says this is very country specific. In the US and Europe, Amazon is again the market leader. It is also expanding rapidly in other markets such as Australia and Latin America. 

For those looking to China as a market, the Chinese ecommerce giants have marketplaces set up specifically for overseas businesses. The main options would be Alibaba’s TMallGlobal and JD Group’s JD Worldwide. Royal Mail has even set up a ‘store within a store’ for UK businesses to sell through TMallGlobal. Andy recommends businesses considering ‘e-exporting’ look at the UK Department for International Trade's guidance as a starting point. 

Businesses should also not think online marketplaces are only for business to consumer (B2C) markets. For B2B businesses, Amazon is again the dominant player through Amazon Business. According to its website, it has over a million business buyers worldwide.

Taking the plunge (or not)

Izabela Catiru, product marketing manager at ChannelAdvisor, an e-commerce cloud platform used by businesses to manage and streamline their e-commerce operations, says nearly all products can be sold through marketplaces and that there are hardly any unsuitable products. But she does highlight a number of categories that consistently perform the best: clothing, fashion and accessories; health and beauty; and home and garden products.

She says it’s probably easier to say which businesses would not be a good fit – those which operate with very thin margins: “Marketplaces take a percentage of sales, so do the payment providers such as Paypal or Stripe. On top of that, investing in advertising on the larger marketplaces is really a prerequisite for success. These costs add up and can make the channel unviable.”

The other caution she sounds is that businesses should make sure they are able to meet the fulfilment requirements of their chosen marketplaces, which are often quite demanding: “Marketplaces will have minimum standards for things like delivery times. If you persistently fail to meet these or if you run out of stock, you might be removed from the marketplace which can be hugely damaging.”

However, says Izabela, this is precisely the reason that the fulfilment services provided by some of the marketplaces (Amazon in particular) are so popular. For a fee, businesses can have their products collected by Amazon and delivered to customers, or they can ship a bulk pallet to Amazon for it to manage the fulfilment process. 

But she also stresses that the smaller or niche marketplaces shouldn’t be ignored: “Even though they won’t have the volume of sales going through them and they may not have the logistical support offerings of the larger marketplaces, they might be better because it could be easier to generate sales. These niche marketplaces tend to have ‘high intent’ audiences, and the competition might be less too.” 
 


Links from this website exist for information only and we accept no responsibility or liability for the information contained on any such sites. Please note that clicking a link will open the external website in a new window or tab.

5 start-up lessons from 2020

What new businesses can learn from those that have survived and thrived through the past few extraordinary months

5 start-up lessons from 2020

Ian Duffew, a consultant working with business growth advisors Elephants Child, has advised companies as they grappled with the challenges posed by the Covid-19 pandemic. He previously worked at a senior level across industry sectors and has served as a non-executive director on the boards of several SMEs and believes there are some essential lessons that start-ups can learn from those that thrived in 2020. 

1. Stay close to your customers

Start-up companies have enjoyed real success by staying in regular dialogue with their key customers and providing a responsive and supportive service.  As a result, these SMEs were in the right place at the right time to assist clients who needed help. Companies that survived prioritised their key customers, continuing to meet with them on a planned and scheduled basis. Normal service continued. 

Where it was possible, they met in person, obviously taking precautions and sticking to strict social distancing rules, wearing PPE and washing hands regularly. However, where face-to-face meetings were not possible, these companies made maximum use of technology by becoming proficient with Teams, Zoom and other meeting applications. They looked for new and innovative ways to communicate and then adapted quickly.

2. Be prepared to step outside of your comfort zone

In 2020, smart businesses responded to requests for support that were not necessarily part of their original offering. With the pandemic throwing up many different types of challenges, customers needed (and still need) support that probably wasn’t in any initial business plan. Successful SMEs took the risk, stepped outside of their comfort zone, and learned quickly.  

Ian says: “A great example of this is an engineering SME that set up to provide equipment maintenance. They secured an order and started work on a client site, servicing assets.  Within a week, the client came to them and explained that another supplier he regularly used for general site infrastructure maintenance was temporarily unavailable. The client asked if the SME would be prepared to take this work on. After an internal Teams meeting that afternoon, and an assessment of the potential risks, they agreed to take on the extra work. As a result, the original order was extended by 90 days, the SME has a new string to its bow, and a significant amount of goodwill is now stored up with that client.”

3. Look after your cash 

Start-ups that survived 2020 managed their cashflow very carefully. Overheads were kept to an absolute minimum and robust plans were in place to drive down debtor days. Those that are still trading frequently took the opportunity to negotiate better payment terms, both with customers and suppliers. Some moved to pro forma invoicing as standard, significantly reducing the risk of the bad debt that has seen some start-ups fail in the last 12 months.

Making good use of government support, such as the Bounce Back and CBILS loans has also been an important ingredient for success. Ian says: “Many companies have taken these loans in order to survive but some have used this cash injection to grow, looking at ways to invest this money and make it work hard for the business.” 

4. Keep on trading

In the early days of the pandemic, when the furlough scheme first provided the opportunity to get people off the payroll, a lot of start-up SMEs took the decision to ‘mothball’ for three or even six months. Others opted against this, recognising instead that this was an opportunity to grow into competitor space and, whilst some scaling down may have taken place, these businesses took the decision to keep trading and were there to fill in the gaps being created.   

Re-starting any business, having spent months out of action, is always difficult. Many of those re-entering the marketplace faced competition from active and thriving SMEs who had maintained a presence, stayed close to their clients and responded to additional requests as a result of gaps in the supply chain. Ian adds: “If you’re still operating when others aren’t, there will always be more opportunities available. Those that succeeded made sure clients knew they were open for business and were not afraid to ask for the work. The smart start-ups didn’t just assume they would automatically fill the vacuum, they were pro-active and positioned themselves to respond.”

5. Cash in on goodwill

Many customers that were well supported remained loyal to those who stepped up during 2020. In an unprecedented year, the creation of customer goodwill was hugely prevalent for those start-ups that kept going, and in difficult moments, some were able to cash in on the credits they had previously earned, both with customers and suppliers.

Ian recalls: “I was so encouraged recently by the news of a nine-month start-up that was struggling to continue. They had bent over backwards for a major customer throughout the summer but other orders they were expecting had been pushed back to 2021. They approached the customer to ask if there was anything he could do to help. Reflecting on the excellent support he had received from this business, he decided to bring forward and award them a project from his 2021 budget, with favourable payment terms too.” 

Many organisations generate high levels of goodwill.  Those that survived were not afraid to cash in on it. There have been few periods in recent decades that were as difficult for businesses than 2020. Start-ups that want to succeed in the future need only look at those companies that have thrived to find lessons that can underpin their own success long into the future.
 


Elephants Child Consultancy provide a consultative, analytic approach to leading, developing and implementing successful business strategies, and they are a corporate partner of St. James’s Place. Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.

Learning resilience from lobsters

What an unlikely alliance between a Welsh fisherman and a portrait photographer teaches us about business in the pandemic

Learning resilience from lobsters

A photoshoot for the Department for Environment, Food & Rural Affairs on a windy beach in North Wales may not be the place you’d expect a lockdown-beating business idea to be hatched. But with export routes shut down, fisherman Sion Williams and photographer Jude Edginton formed an unlikely alliance to save the lobster season and build a more resilient fisheries business.

Around 90% of the lobsters caught in Welsh waters are exported to China and Europe1. With Sion unable to reach these markets and Jude finding photographic commissions cancelled as lockdown loomed, the pair agreed on a classic business pivot. Jude promised to use his experience of marketing and storytelling to help sell Sion’s catch directly to consumers in London.

The agreement saw the creation of new business Lockdown Lobsters and demonstrates how seeking out new partnerships and different skills can help businesses to survive and thrive in tough times. While Sion, a proponent of sustainable fisheries, provided the lobsters, London-based Jude set about marketing them on What’s App, building a website and developing a plan to get the lobsters from the Irish Sea to dining tables in the capital within a few hours.

Marketing on What’s App

During an initial three-week period while the lobsters were being caught, Jude, whose regular job involves taking portraits of people ranging from Boris Johnson to Boris Becker and from Little Mix to Gogglebox stars, approached friends and business contacts in a What’s App campaign – some of those contacts were celebrity chefs and food critics. The approach was a success and by the time Jude made his first run from Wales to five drop-off points in London, socially distanced queues were waiting for the deliveries.

After the first three weekly deliveries there was a natural break when the lobsters shed their shells and fishing stopped. Jude used the time to develop the website and refine the operation, which now uses Zip cars for rapid delivery across the city. During this period his initial focus on business contacts paid off when a food and wine writer, who had received some of the lobsters, wrote a  three-page article on the experience in the FT magazine – helping them to sell-out the catch for the next six weeks.

Sion explains: “The lockdown due to the virus had a devastating effect on my business. Firstly, the merchants I sell a high percentage of my catch to stopped buying as their markets in Europe and Asia had closed, with no guarantees that they would be buying for the next five weeks, possibly five months. On top of this the local shellfish processor and restaurant closed due to the requirements of the lockdown. 

“Through Lockdown Lobsters I was able to carry on fishing and earning a living. I have also sold all my lobsters within the UK, reducing air miles and carbon footprint. Furthermore, we have established a connection with our customers by selling our story and giving our customers provenance of their seafood. I have learned that there is a market within the UK for our lobsters, it is a matter of making the customer aware of the availability of the high-quality seafood that is on their doorstep and getting it to them.”

Changing business models

Associate Professor and Head of Enterprise Education at Kingston University Martha Mador cited Lockdown Lobsters as an example of how some entrepreneurs were changing their business models to build resilience in the face of challenges such as the Covid-19 pandemic and Brexit. She explains that new relationships, greater use of digital and finding new ways to reach customers are all ingredients of the resilience that is needed for companies to thrive.

To help your business become more resilient, you need to find partnerships and supportive networks where ideas and concerns can be shared, she explains. You should also aim to use digital technology as much as possible, whether that’s how you interface with your customers, how they purchase your products or how you communicate. You can also look for new markets and prospect for clients digitally. New market opportunities can be tested easily with targeted advertising on Facebook and LinkedIn.

And make sure that you are managing your website so that it can easily be found in searches, says Martha. You could also consider developing a marketing app to make it simpler for customers to interact with you and buy your products on their phones. Another way to make your business more resilient is to put your products and services onto platforms which attract more customers, such as Etsy, eBay, Amazon or the many more specialist sites.

Martha explains: “You need to do something new which addresses this online world which we find ourselves in and make something of it. So, you need to redesign your services or your products, reconsider how you are getting to people, how you are reaching your customers and maybe pivot into different businesses or business models which are more heavily digital than previously. And I also think partnering and finding new people to work with and to develop new ideas and services with is important.”

Lockdown Lobsters is going from strength-to-strength and has recently begun delivering lobsters from Bridlington in Yorkshire, while fishermen in Inverness have sent lobsters on the overnight sleeper train to London to be distributed across the city.


The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.

1. www.fishingnews.co.uk, 19 March 2018

Preparing for business exit in 2021

What to expect from buyers and how you can prepare if you want to sell your business in 2021

Preparing for business exit in 2021

While some businesses that have proved resilient in the pandemic have continued to be acquisition targets, for others exit plans were put on hold as Covid-19 disrupted trading. If you’re now thinking that 2021 could be the year for exit, we look ahead to see what to expect from buyers and how you can prepare.

Craig Hewitt-Dutton, Partner, LockDutton Corporate Finance, says: “No one can predict the future, but positive news about the pandemic – like a Covid-19 vaccine – could bring strong market growth in 2021, making it a very good year to sell a business. And it’s always the case that potential buyers will pay a premium price for the right business.”

There’s still demand, says Craig, from private equity investors, and some interest will be motivated by businesses protecting themselves against Covid-19 by diversifying. He also expects a new focus on acquiring UK companies as a reaction to the end of the Brexit transition period.

Whatever the business environment, Crawfurd Walker, Chief Revenue Officer for business growth advisors Elephants Child, says the same basic rules still largely apply if an entrepreneur is looking to exit in 2021. “Potential buyers will want to see a three-year business plan, sound trading figures and a good senior management team. As ever, they want to be confident about what they’re investing in – but even more so in this pandemic era.”

Proof of resilience

Both Craig and Crawfurd agree that how a business has responded to Covid-19 challenges is the new factor in determining how attractive it is to a prospective buyer. Crawfurd explains: “Buyers will want strong management that changed the business model to make it more flexible and resilient to something like Covid happening again and whatever the future business environment will be.”

Pre-sale negotiations and due diligence checks in 2021 could take longer than usual, says Crawfurd, and deals might be delayed until buyers have seen “six months’ of ‘new normal’ trading” so that a business can prove its resilience. “It depends on the company, and the changing pandemic situation, but that could be six months from October 2020, or from 1 January 2021.”

Business owners looking for a 2021 exit should bear in mind that a company saddled with debt will be even more off-putting for buyers than in previous years, says Craig, while the Covid-19 working-from-home revolution has reduced the importance of a company’s property assets. “The need for large, expensive-to-maintain offices is receding and buyers prefer leased property rather than anything owned outright.”

Entrepreneurs who mean to quit their business straight after its sale should also remember buyers need to feel sure the company can thrive without the person who created it. Crawfurd says: “Sometimes, the whole business is based around the owner so, in the nicest possible way, you need to ensure that you’re ‘redundant’. Have structures in place so the board can run it without you. Otherwise, the buyer could insist you stay on for a number of years.”

Contingency plans

A business will also be more attractive to buyers in 2021 if it can show it has contingencies in place for the UK’s new relationship with the EU. Craig says: “That includes ensuring employees who are EU citizens have applied for the right to stay in the UK by the June 2021 deadline.”

But Crawfurd stresses that preparation sooner rather than later is the way to put a business in the best position to sell at a good price: “There are exceptions but preparing properly for sale takes 2-3 years. If you temporarily put exit plans on hold because of the pandemic, review them again as quickly as you can so that you’re ready to sell in 2021.

If any of the issues in this article apply to you, contact your St. James’s Place Partner who can help you explore your options.


Exit strategies may include the referral to a service that is separate and distinct to those offered by St. James’s Place.

The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.

Managing Covid-19 debt

Businesses have borrowed heavily during the pandemic. Owner-managers face a whole new set of psychological and practical challenges

Managing Covid-19 debt

UK businesses borrowed five times more from banks between January and August 2020 than in the whole of 2019. According to EY Item Club1, over that eight-month period, new borrowings (net of repayments) totalled £43.8bn, compared to the £8.8bn of 2019.

Small businesses have increased their debt levels the most. While EY forecasts the total stock of business loans from banks (which includes outstanding balances of loans taken out in prior years) to be up 11% in 2020 (compared to 2% growth in 2019), it reports the jump in SME lending stock at around 20%2.

Sanjay Bowry, business growth advisor at Elephants Child, says this isn’t surprising: “SMEs don’t typically operate with large cash buffers and even a small drop in business activity can create a cash crunch very quickly. So, with the large and sudden impact of the pandemic, they have quite rightly been taking up the debt support that has become available – mostly from the government-backed Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS)”.

But, says Sanjay, this is presenting owner-managers with new challenges, both psychological and practical.

Psychological challenges

Sanjay says that for many business owners, taking on debt is anathema: “They have financed their businesses successfully from day one without debt and never even considered borrowing money. For business owners with this mindset who have now taken on debt, it can be a time of enormous stress. Others have a diametrically opposite view. Debt isn’t seen as a negative but as an enabler for survival and growth.”

What Sanjay stresses to clients though is that debt isn’t a good or a bad thing, it is simply a business tool that should be used appropriately – be that to survive or to grow. His advice to business owners who have reluctantly taken on debt during this crisis, and whose natural disposition is to worry about it, is that the most effective stress reliever is to plan rigorously for how you will manage that debt and its repayments. He says: “Just knowing exactly what actions you need to take and what scenarios you have planned and prepared for makes the whole situation much more manageable and less stressful.”

Another tip for stressed-out business owners is provided by Rob Warlow, founder of SME loan broker Business Loan Services. He says that one of the things entrepreneurs and business owners are often not so good at is putting their hand up and saying they need help. “It’s just not in their DNA”, says Rob, “but probably the top tip from me is to take some outside advice. Good advisers will act as a sounding board, will bring ideas to the table you may not have thought of, and will be supportive from an emotional point of view.”

Practical tips

Miguel Calabrese, managing director of Blue Rocket Accounting, gets into the nitty-gritty of Sanjay’s point about rigorous planning. He suggests doing detailed cash flow projections for a 13-week period (90 days).

He says: “We like 13 weeks as a timeframe because if you do spot a cash crunch, there is enough time for you to do something which will have an impact on the cash position at the end of this period, such as finding more funding or cutting costs. And it is a short enough timeframe to make the cash flow projections fairly easy and accurate.”

Miguel recommends making this a ‘rolling’ forecast. At the end of week one, add week 14 to the forecast and update the intermediate weeks’ forecasts. Cash flow planning then becomes a weekly exercise for business owners who quickly build up a very detailed knowledge of their short-term cash position and get more and more comfortable because there is less uncertainty.

His suggestion for starting the forecast is to begin with outgoings. These should be fairly predictable for the next 13 weeks. Revenues are likely to be less certain, so Miguel suggests looking at scenarios. Look at a best-case scenario, where the Covid recovery really takes off and how you might capitalise on that. Then look at a worst-case scenario where revenues are badly affected and make sure you have a contingency plan so that that cash crunch can be survived.

His other top tip is around credit control. Miguel says: “Many people went a little bit soft on their credit terms in the first lockdown which is understandable but that can’t go on. Put a proper credit control system in place and make it consistent. People tend to be scared off by having to chase for money but don’t be, if payments are due to you, chase them up. That’s just normal business.”

Managing payment terms is also a point stressed by Rob Warlow. He says: “Are you maximising your creditor terms – if someone is giving you 45 days are you taking it? In this case there’s no need to pay in 15 days. Yes, you need to keep good relationships with suppliers, but you have to look after number one, and as long as you don’t go over your payment deadline, there’s nothing wrong with that.”

A last tip from Rob is about communication. He says: “Keep your suppliers and lenders in the loop if there is a problem on the horizon. If you see a cash crunch coming, sometimes the natural reaction is to keep it quiet. But you actually get much more credibility and deepen your relationship with suppliers and lenders by engaging early in the event of a problem. Remember they will also be wanting to know where their cash flow position stands. The last thing they want is a call from the blue saying I can’t pay you this month. Their reaction will probably be ‘why didn’t you tell me earlier?’.”

 

 


The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.​

Sources

1 EY

2 EY ITEM Club Outlook for financial services, Autumn 2020

Links from this website exist for information only and we accept no responsibility or liability for the information contained on any such sites. Please note that clicking a link will open the external website in a new window or tab.

Starting a business in the pandemic

Counterintuitively, progressing with a new enterprise now could be a smart move

Starting a business in the pandemic

The number of businesses starting up has increased dramatically during the pandemic. Latest government figures show 51,269 new UK businesses launched in Quarter Three this year – 30.2% more than in the same period last year.1

Take husband and wife team Guy and Abi Fennell who, in June, launched Pura, an online-based company direct-selling their own brand of affordable, eco-friendly, plastic-free, compostable baby wipes and nappies via mail order and subscription.

In their first week of trading they took 27,000 orders, and have since seen sales growth of between 150% and 200% week-on-week and their subscription base expand by 70% weekly, and now employ 30 people. Passionate advocates of the green agenda, they’re expanding into Germany this year and will launch in France, Spain and Italy early in 2021 with long-term plans to enter the US and Canadian markets.

Formidable challenges

Having identified a huge hole in the baby care products market three years ago, they set about developing eco-friendly products and finding reliable, capable manufacturers with a reliable supply chain to make them, aiming to launch in 2020. Then Covid struck; yet despite the formidable challenges it posed, they pressed ahead anyway.

“Extensive research and preparation is important, but you need to set out to be a serious market disruptor from the outset. Our decision to adopt an online, direct-sales model, cutting out retailers so we can control our prices and margins to compete against big players, has been critical to our success,” explains Guy.

Furthermore, any successful start-up in the current environment needs to be as flexible, nimble, agile and as resilient as possible to meet rapidly changing consumer demands, he argues.

Embrace e-commerce

“With people increasingly turning to online for their purchasing, it’s essential to embrace e-commerce and utilise the growing power of social media for your marketing as well as conventional advertising,” explains Guy. “It’s relatively cheap and you can use it to attract celebrities and influencers to become ambassadors for your business. 

“Good communication is key but obviously difficult with social distancing issues. However, our team has trained and operated virtually right from the outset, using tech such as Zoom and Microsoft Teams and mobile video and we’ve successfully built team spirit and forged a company identity. Of course, you have to have personal passion and belief in the business you are trying to create.”

Rebel rouser

Fellow entrepreneur Cordelia Kate wholeheartedly shares that self-belief philosophy, having successfully founded Rebellious Business Network after lockdown in March to help entrepreneurs running small, service-based businesses make more money.

A mother of three, she’d been running her own freelance affiliate marketing business since 2017, but with the onset of the pandemic, decided to rapidly redefine her enterprise for the new environment and launched Rebellious from her home with a simple virtual networking event. Nine months later, her brainchild has mushroomed, generating six-figure sales and acquiring two employees by providing free networking and additional paid-for support services to a 500-strong – and growing – community of small businesses.

Passionate

One-to-one coaching, expert talks and virtual business boot camps are offered, along with a training and coaching programme to help clients achieve six figure incomes, and the company’s first virtual networking conference took place in November. This time next year Cordelia expects sales income to treble.

“If you’re planning to start a service-focused business, you need to feel passionate about what you do because, ultimately, ‘you are your business’ and remember, operating online is the new normal for enterprises, thanks to the pandemic.”

She adds: “It’s vital to understand where your clients stand in this rapidly evolving market and what they need. So, before spending on marketing and advertising campaigns, work ‘organically’ by leveraging your existing social media networks and contacts and converse with other businesses and your potential customers.”

 

 


The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.​

1. ONS

Links from this website exist for information only and we accept no responsibility or liability for the information contained on any such sites. Please note that clicking a link will open the external website in a new window or tab.

Funding for female founders

Networking and powerful presentations are needed to overcome unconscious gender bias and unlock venture funding, say entrepreneurs

Funding for female founders

The question of why, in the start-up capital of Europe, female entrepreneurs have so much difficulty getting access to funding to start and scale their businesses is the subject of Government reports and ongoing debate. The Government-commissioned Alison Rose Review of Female Entrepreneurship (March 2019) found that while UK companies attracted more venture capital than those in any other European nation, just 1% went to all-female founding teams.

It is a complex problem that affects the whole of the UK economy, not just those women seeking to grow their enterprises. Rose points out that up to £250 billion of new value could be added to the UK economy if women started and scaled new businesses at the same rate as men. So why does the disparity exist and how can female entrepreneurs go about levelling the playing field and attracting the investment they need?

According to businesswomen who have successfully scaled and sold companies, women often face (mostly) unconscious sexism from largely male investment teams. Only 13% of senior people on UK funding teams are women, according to Rose. Sue Nelson, who founded niche SME tax firm Breakthrough Funding five years ago and sold it to EY in March, says these investors often fail to recognise the value of opportunities being presented by female founders.

Focus on finance

She explains that while men are often very confident in a pitch and paint an extravagant picture of the opportunity, women are sometimes less comfortable in a pitch environment and that can make their presentations less compelling. Female entrepreneurs , therefore, not only need to have all the figures at their fingertips and know exactly what they want from the investor, but they may also need to work hard to develop a more confident presenting style. This could mean seeking out the support of a business advisor or mentor and your St. James’s Place Partner can help you find the right support.

There are many ways to get over your nerves before a pitch – Sue gets “pumped up” by listening to The Prodigy loudly in the car on the way there – but practicing your presentation ahead of the meeting is critical. “And when you get there you have to take up all the visual cues of what that person or that panel is looking for,” she explains. “Are they very formal? Are they quite informal? Are they chatty? Are they in listening mode? And then you need to go with it. Don’t be rigid about presenting. You know it all, you’ve practiced it and practiced it and when you get there it’s time to relax and do whatever it is that you think they want at that time.” 

She adds that it’s essential for women to focus on the finance and not to  overly emphasise the other important topics such as social purpose and community benefit. “Investors primarily want to make money,” she says.. If they are investing £100,000, they want to know when they are going to get their £100,000 back and when they are going to get more than the £100,000, they put in. They want to know whether they will double their money in five years or in two years, and they want a compelling story that convinces them that will happen.”

Lacking confidence

Emmie Faust, an entrepreneur turned business growth consultant, won £200,000 in funding on the TV show Dragon’s Den at the age of 25 with a male business partner. Although that venture was unsuccessful, she has since sold two businesses for seven figure sums and has never had difficulty attracting funding. 

She says: “What I say to my clients is that in order to secure funding, you need to start networking. I’m part of loads of female networks but it doesn’t have to be just female networks, you just need to start networking and you need to start getting out there. That’s one thing that I believe is massive. You’ve got to be incredibly proactive. It’s very hard to get funding, it doesn’t just land in your lap.” 

As a mother-of-four Emmie says that another issue holding businesswomen back is that they often take on the lion’s share of responsibilities in the home and take time out to have children. She says that when she had each of her children, she returned to work lacking in confidence and it took time to build that up again.

Sue and Emmie now mentor female entrepreneurs and help them to win funding. Sue explains: “I think I have spent quite a lot of my career with men not listening to me and talking over me or across me. What I do now is help women get into business, make sure they are getting into it for the right reasons and that they know what they are doing. I think as a successful female founder it’s your job, as they say in America, to send that elevator down and try and help other women.”


Sue and Emmie were both speakers at a recent WealthiHer Network event, alongside St. James’s Place, in which they discussed the topic of presentations for funders and clients.

Reintegrating staff

The Job Retention Scheme is now expected to come to an end next month when lockdown is eased, and many furloughed employees will be heading back to work for the first time since March

Reintegrating staff

The Job Retention Scheme, which has seen the government paying for 80% of furloughed workers’ salaries for months, has now been extended until the beginning of December. Its replacement, the somewhat less generous Job Support Scheme, will then take its place.

Through the new scheme the government aims to protect viable jobs – those where employees are working at least 20% of their normal hours. The cost of hours not worked will be split between the employer (5%), the government (62%) and the employee, through wage reduction. There are slightly more generous arrangements for businesses forced to close because of local restrictions.

Chloe Carey, who last year sold the human resources consultancy she founded in 2003, now works with business growth consultants Elephants Child to help SMEs tackle the HR challenges of the pandemic. She says that those who have been on furlough may have to be reintegrated into a business that is very different, having pivoted rapidly and developed new products and services during the Covid-19 crisis.

At the same time, she adds, there is evidence of increased mental health concerns among those who have been furloughed for long periods. And Chloe warns that there is the potential for resentment among staff who have been forced to work through the crisis, often with increased workloads and responsibilities, while their colleagues have effectively been on paid leave.

Hold appraisals

While many SMEs don’t have a formal appraisal process, planning in a one-to-one discussion with all employees can be a good first step towards reintegrating staff. This provides a useful opportunity to focus on training, align the goals and responsibilities of returning staff to the new business priorities, and even to encourage them to volunteer during the hours that they aren’t working to improve their mental health.

Chloe explains: “I think it would be a good time for such a discussion even though people aren’t at work for their full working hours because it’s a great opportunity to focus on their learning and development. Create a plan which they could begin during this period of reduced hours. The priority really is to ensure the staff feel supported and valued whichever camp they are in and that their health and safety, and wellbeing, is the priority of the company.

“You can find out so much about someone’s aspirations, fears and anxieties from having a discussion like that. But you should make it a more formal, structured process rather than just a bit of a catch-up about Covid or furlough. They will still have a number of issues going on around them while they are trying to hold down a job where they feel disconnected and they are not really sure what is going to happen next.

“You might take the opportunity to reset objectives because the actual focus of the business may have changed and the product set may have changed. The businesses that are doing well are pivoting quickly and making changes to their direction and that’s a really good opportunity to make sure all your employees are on the same journey and to tweak what your requirements of them are.”

Individual plans

A formal discussion is also a good opportunity to find out more about each individual. Some may be fearful of infection, or social isolation, while others may also be struggling to juggle childcare if schools close. Those who have been on reduced salaries may have financial worries, while some may have underlying health issues that make them vulnerable or may have suffered a bereavement during the pandemic. Chloe explains that understanding these issues can help employers put together a plan which is specific to the individual.

One thing that all companies are doing at the moment is planning and forecasting and ensuring they can see the affordability of staff. However, Chloe points out that many staff are reconsidering their priorities during the pandemic and may be open to more flexible or part-time working that would both meet their aspirations and the company’s cash flow needs. The discussion would also provide an opportunity to gently investigate such options.

“The discussion could be couched in such a way that it’s not just about what the business goals and objectives are and where the company’s focus is,” says Chloe. “It’s also about what the employee’s objectives are, their personal objectives, their aspirations, and their career plans. How can you marry those two things together to make sure it works for you and your employee?”


5 signs it’s time to sell

Recognising the clues that you’ve reached the end of the journey with your business

5 signs it’s time to sell

Despite the challenges of Covid-19 and the continuing uncertainty around Brexit, there are still buyers who are ready and willing to snap up the right business.

As Martin Brown, founder of business advisors Elephants Child, says: “There’s still an awful lot of money to be invested – and we’re working with buyers that want to do progressive things around purchasing to grow.”

Julian Goulding, of legal firm Blake Morgan, agrees. “I’ve seen more activity in recent weeks than I’ve seen in the previous six months with plenty of buyers out there. Of course, it depends on the industry sector – some are doing better than others. Some buyers are looking for bargains, some are looking to expand their business and some are looking to buy as a strategy to help their business survive.”

It’s clear, whatever their motivation, that there are buyers in the marketplace – but as a business owner, are you ready to sell? Here are five common signs that it might be time to exit.

1. Aspiration 

One tell-tale indication is the realisation that you’ve achieved your business ambitions, or that you expect to hit those targets in the next 12 months to three years. “Those aspirations could be defined by time, the owner’s age or the monetary value of the business,” says Martin, “but if they’re coming to fruition, it’s time to at least consider your exit options.”

2. Passion

Another sign you should step away is finding you’ve lost the passion – the energy and drive – that helped you launch the business. Julian says: “It can happen any time, but in the current circumstances, for example, it can’t be underestimated how draining it has all been and some people are concluding they can’t and don’t want to run a business anymore.”
He adds: “Other business owners realise there’s no-one in the family to take on the reins, so sale is there only alternative if they want to step down and realise the value of what they’ve put into the company.”

3. Glass ceiling 

Building a company is a journey with very different phases of growth – or “glass ceilings” as Martin calls them – along the way. He explains: “We often see entrepreneurs or business leaders who take the business through two or three of these ceilings but then find the next stage unattractive because the commitment required isn’t justified by the rewards it will bring.” 
Julian adds: “A business owner may find they’re reluctant or unable to put funds in or make hard decisions like making long-standing staff redundant as part of a restructuring. So maybe it’s time to hand over to someone else to do these things.”

4. Market cycle 

Martin sums this up by saying: “This is about not ending up being the guy who’s selling Filofaxes when the iPhone is launched!” He continues: “You want to be selling when you can maximise the value of your company. That could rest on the state of economy, a change in legislation or the relevance of your technology in the marketplace. 
“Timing – and a bit of luck – are key. We’ve all read about the start-ups that aren’t even making profit but then get bought for big bucks by a giant like Microsoft because their technology is the hot property at that moment.” 

5. Forced

Sometimes the sign you should sell is that matters in your personal life simply become more pressing than your business. Martin says: “It’s a horrible place to be when you’ve toiled for years but, sadly, sale can simply be forced on you by death, divorce or illness.”

With plenty of buyers and finance still in circulation in the UK economy, if any of the above is relevant to you, perhaps it’s time put up the ‘for sale’ sign.

 


If any of the issues in this article applies to you, contact your St. James’s Place Partner who can help you explore your options.

Should you invest now?

Why spending money on your enterprise during the pandemic could pay in the long-term

Should you invest now?


Bank of England chief economist Andy Haldane is urging entrepreneurs to invest in their businesses now to be in a strong position for when the Covid-19 crisis passes.

As latest figures from the Office for National Statistics reveal, business investment fell by 26.5% in the quarter to June 2020, Haldane argued in The Times that it is counter-productive for business leaders to hold back on investing in their enterprises.

His concerns are echoed in the report Post-Pandemic Economic Growth, compiled by Continuous Improvement Projects in collaboration with Middlesex University and Brunel University London and published on 8 October by the Government’s Business, Energy and Industrial Strategy Committee. 

Based on a July 2020 survey of 122 businesses of different sizes from 16 different sectors, the report found business investment fell during the course of the pandemic. 

One of the authors, Dr Monomita Nandy, Associate Professor of Accounting & Finance at Brunel Business School, says: “Judging by the responses, most organisations appear to be looking at ways to recover and manage what they already have.” 

Many have been somewhat short-sighted and failed to “turn fear into opportunity” by investing in their own organisations, she explains. Instead, they passively rely on the government for direction, implement short-term fixes and stockpile cash, and often don’t take advantage of government financial help and low interest rates.

Best strategy

Surprisingly, 82% of businesses surveyed say they’re confident they’ll grow within the next two years, with digital solutions and extending flexible working cited as top post-Covid priorities. Dr Nandy says: “That’s encouraging of course, but the best strategy for surviving and achieving growth after Covid isn’t waiting until things get better but investing in your business now. 

“That includes improving business operating systems, securing your supply chain and introducing new technology. Revise your business plan and operating model if necessary, ensure you have a development strategy in place and perhaps consider expanding internationally or even making acquisitions. This will put you ahead of reactive-only competitors.”

Dr Nandy adds: “Customer expectations are rapidly evolving in the crisis, so companies must be flexible to meet them. That involves much more than just implementing digital solutions though. It also means investing in people – retaining and hiring the right employees and training them to help deliver agile responses to customers’ changing needs.” 

Meeting the challenge

One person who believes in investing in his business now is Steve Witt, co-founder of franchise travel company Not Just Travel, which has expanded its network of self-employed online travel advisers across the UK.

During the pandemic the company has been reinvesting business revenue into recruiting, training and supporting up to 15 new advisers every month, and now has more 750 advisers and more forward bookings on its books than ever before.

Steve explains: “We’ve remained very pro-active throughout the pandemic. We revisited our business plan, put a survival plan in place, set aside money to keep things going and, critically, determined changes we needed to make to meet the challenge.

To help the business grow during Covid, the company doubled its marketing budget and expanded its leadership team with two new positions – Chief Business Development Officer and Head of Operations and Experience. 

“Given face-to-face interaction isn’t possible, we invested in new, high-quality technology to deliver virtual training and redirected support staff to assist our corporate training team,” says Steve. 

Not Just Travel also brought in mind and business coaches to support employees, recognising the importance, and business value, of maintaining people’s wellbeing and mental health during this stressful time.

Pole position

Steve concludes: “Since lockdown, high street travel businesses have suffered, and self-booking holidaymakers found themselves dealing with frustrating and time-consuming rebookings, refunds and cancellations. 

“That puts our customer-friendly online model in pole position for the recovery – and we’re investing hard now to exploit that.”

If you are considering investing in your business or need support with any other business issues, contact your St. James’s Place Partner, who can help you explore your options.


The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

The mental health challenge

Business psychologist Julie Brophy explains how leaders can manage workplace wellbeing and spot the signs when an employee is struggling

The mental health challenge

If your employees have been working at home for months the isolation and new ways of working could be taking a toll on their mental health, which may lead to personal difficulties for them and to a fall in performance at work. As a remote leader it can be more difficult to spot the signs that someone is struggling when they are working from home but there are signals to look out for.

Julie Brophy, a business psychologist and Principal Consultant at Cambridge-based business management consultancy OE Cam says that at some businesses the structures that were put in place at the start of lockdown to support social cohesion and enable regular informal contact with employees have fallen away over time. Owners need to reassert these and put in place reminders for individuals to be contacted to see how they are. There are red flags that can alert you of a remote employee who is struggling mentally, if you take the time to look.

  • One indicator is a decline in the quality or speed of their work. That’s got to be balanced, however, with whether they are busy because there’s a lot of anecdotal evidence that people are going from video conference to video conference and so their days are absolutely packed, says Julie. It could be that an employee who isn’t working as well as they were before lockdown is just very busy and this may be compounded if they are taking on extra work because you have fewer people in the business.
     
  • When your people are on calls you should look out for a change in the use of language, tone of voice and manner. Do they seem quieter and more subdued and are they using fewer positive adjectives than you would expect? Again, this has to be balanced against other factors. They may not be responding in the same way in a video conference just because that’s not the way they are used to holding meetings.
     
  • Is an employee making less of a contribution in discussions than you would expect? One of the more difficult things about being on a video conference rather than being in a room is that it’s harder to read body language. The non-verbal cues are harder to pick up but you need to look out for things like whether they are sitting back more or coming forward into conversations. How are they compared to how they would normally be? Once more the employee could just be responding differently to a different medium, sitting back to reflect before getting involved.

So, it’s up to business owners and line mangers to look out for these warning signs and decide, on balance, whether someone is struggling in the ‘new norm’. Julie explains: “If you are seeing that someone isn’t contributing as much in a meeting, that’s the kind of discussion to take offline. Reach out to them one-to-one and just ask how they are doing. It shouldn’t be a performance-related conversation, just ask them how they are doing and how things are at home.”

Not everything has changed

Part of the leadership role is to reassure the team. Point out that not everything has changed, highlight what they are good at and give them anchors by explaining what in their life is the same. Leaders should be role models when it comes to behaviours in a remote environment. “Perhaps at the end of a call you should say, yourself, ‘I’m just going to take half an hour and go out for a walk because I’ve been on calls all day and I just need to clear my head’,” says Julie. “You should model that kind of behaviour.

“We’re working with one company that has actually started to have meetings that you attend while you are out for a walk. It’s nothing confidential but it’s that kind of checking-in conversation that they have while they are walking so they can make sure that everyone is getting away from their desks and taking time to relax a bit and get outside.” This idea was echoed in a previous Entrepreneur Club article in which Kristen McNamara, Senior Director of Staff Development and Talent Acquisition at recruitment agency Robert Half, explained that she took the time to speak to some of her remote staff while walking as part of an informal dog walking group.

Video conference overload

OE Cam has also been talking to companies about how they use video conferencing, which many assume is the way forwards. The challenge with such technology, however, is that it’s much more intense than a simple telephone call because you’re forced to keep eye contact all the time. Taking turns in the conversation also becomes more difficult, it’s easy to end up talking over each other and you often end up with gaps in the conversation. So, considering more carefully how often you use different kinds of technologies, including the telephone, could help employees cope more easily with new ways of working.

OE Cam is currently carrying out pan-European research into agile organisations, looking at dimensions such as leadership, innovation, and the mobility mindset needed by people so they can thrive in an agile environment. Among the insights to emerge that are particularly important while people are working remotely is the authenticity of communication; don’t pretend to know something that you don’t. Focus, perspective and autonomy are also key. “Your people will cope better if they can say: 'I feel part of something, I know where I’m going and I have control over how I achieve it',” says Julie.

As an entrepreneur it is important to continually reach out to your people not just to see how work is progressing but also to see how they feeling and coping with the situation.


The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.

When you return to the office

Despite the current situation, sooner or later you'll return to the office and keeping staff safe will be the top priority

When you return to the office

Government advice is now for people to work from home if it’s possible to do so. It has been the norm for many staff to stay away from the office since March, when businesses were forced to make rapid decisions about a shift to remote working. As the pandemic spread at speed, compliance with the law and the safety of employees was paramount, and business continuity plans were formulated almost on a day-to-day basis.

In fact, home working has become so much part of the ‘new norm’ that even before the threat of a second wave loomed large, 50 big employers surveyed by the BBC in August said they had no plans to return their staff to the office until at least the new year. But many business leaders and their employees are eager to get back as soon as conditions allow, craving face-to-face collaboration with colleagues and clients, the separation of work and home, and even that Pret-a-Manger baguette.

Business as usual?

When you are able to open up the office again, the safety of staff will be the top priority and it will be vital that businesses make their workplaces Covid-secure. The Chartered Institute of Personnel Development (CIPD) offers comprehensive guidance on the steps business leaders should take to make their workplaces safe, and the advantages and disadvantages of a full return to the office, continuing with remote working, and the stages in between. It urges businesses to consider three key questions before bringing people back into the office: is it essential, is it sufficiently safe, and is it mutually agreed?

“The response businesses will get from their staff will vary,” notes Lianne Lambert, MD of human resources consultancy Lighter HR. “It will depend on how they have been finding home working and what their personal experience of Covid has been. Some people have been hit quite hard, perhaps they’ve lost a relative or been particularly ill themselves. And they’re going to be more fearful of returning to an office than others, who might be quite blasé about the whole thing. You need to engage with your staff and understand how they’re feeling and what reaction you’re likely to get when you ask them to return.”

One business that successfully brought all its 35 staff members back to work after the initial lockdown was eased is London-based design agency Blacksheep, which undertook a three-phase return beginning in July. The Entrepreneur Club spoke to them before the latest Government advice on home working.

“One thing I didn’t understand when we entered lockdown was the issues working from home presented for some people,” says founder Tim Mutton. “The average age here is around 27 and as much as they live very close to the studio, they might be in a bed-sit that’s not even big enough to get a desk in. We were telling people they could take their computers home and they said, ‘You don’t understand. All I’ve got is a bed.’ I had a massive epiphany at that point: they absolutely love the studio because it offers them more than they have at home. They’ve got the internet, a desk, a kitchen, somewhere where they can sit and eat. I empathise more with our people and understand their circumstances a lot better now than I did before.”

Listen and learn

However, some businesses may have a different experience. Even once risk assessments have been carried out and your business premises made Covid-safe, some staff might be reluctant to come back.

“First, you will need to understand their reasons,” says Lianne. “Have a look at their contract and see if they’re contractually obliged to return. If they refuse, you can go down the disciplinary route. But that should be a last resort. What we've seen is there may be quite a lot of push-back initially, but once you begin bringing people back and they see that the workplace is safe, they feel differently.”

Tim foresaw one significant barrier to business as usual: the limited availability of Covid testing.

“In all the time we’ve been back in, we had one case of someone who tested positive for Covid in the studio. That was something I had to manage – I knew the risk was there. Luckily at that point we were able to get everyone tested, and they all came back negative. If it happened now, we’d have a different issue, because the test stations aren’t available,” he says, citing their only staff member who hasn’t been able to get back into the office because a relative has contracted Covid and she has been unable to obtain a test.

Lianne agrees that a Covid-positive team member shouldn’t be every manager’s worst nightmare. “We have had a couple of clients go into a flat spin at that point, shut the office and send everybody home. By doing that, what you’re in effect saying is that you have not provided people with a Covid-secure workplace. The idea is to make the workplace safe if someone comes in with Covid, not only as long as no one does,” she says.

Creating a safe workplace

The Government offers some key advice on making your workplace Covid-secure, including: 

  • Complete a Covid-19 risk assessment and share it with staff.
  • Clean more often and ask staff and visitors to use hand sanitiser.
  • Ask visitors to wear face coverings.
  • Make sure everyone is social distancing. Make it easy by putting up signs or introducing a one-way system.
  • Increase ventilation by keeping doors and windows open and running ventilation systems.
  • Turn people with coronavirus symptoms away.

In addition, workspaces should be arranged to keep people apart, the number of face-to-face meetings should be reduced, you should consider booking systems for desks and rooms to avoid overcrowding, and make sure that all staff and visitors are kept up to date with your safety measures.


The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.

Is your buyer serious?

What homework do you need to do on a potential buyer to ensure their interest is genuine?

Is your buyer serious?

Receiving an offer for your business can be exciting and potentially life changing. But don’t get too carried away with the flattery and talk of sky-high numbers from your business suitor. An offer can be time consuming, distracting and value destroying if the potential buyer isn’t serious and chooses to walk away.

“It can take you away from focusing on the day job,” says Richard Murray, chief commercial officer at business growth advisors Elephants Child. “You spend all that time and then find out that the buyer was a competitor trying to have a look at your business or tyre-kickers casting their net out with no great intent. Either way by the time you properly re-focus on your business your valuation has been eroded as performance suffers. You have taken a step back just by looking at the opportunity.”

As such it is vital that you determine how serious your buyer is before you start giving up your time and opening the books. That can be difficult for entrepreneurs, most of whom have never sold a business before.

First step

Henry Campbell-Jones, managing director of Hornblower Business Brokers, says the first step is to carry out desk-top research on a potential buyer as well as asking them direct questions. “Find out what their acquisition strategy is,” he says. “What attributes are they looking for in a business and why is your company of interest to them? What do they already know about your company, what is their strategic interest and how would they take it forward?”

Owners should also ask whether the buyer is looking at any other companies and what their track record of acquisitions has been. “Depending on how they respond you can build up a picture of whether the plan has been thought through and whether it is viable and rings true,” Henry adds.

You should also find out whether the buyer knows your market and whether they, or a colleague, have the necessary sector skills, expertise, licences, or qualifications.

Financing a purchase

It is also important to determine how the buyer intends to finance the purchase and what form of deal structure they have created. Is the buyer backed by private equity or loans, or will it be their own capital? Do they intend to put down any money at all? Some buyers look to structure deals in which the seller provides loans to facilitate the process.

“When it comes to funding, look them up at Companies House or a credit rating database where you can see their balance sheet assets for the last financial year,” Henry says. “Look particularly at their cash in bank and net current assets figures.”

Another key is gauging how ready and prepared the buyer is if you agree to more detailed discussions. Do they have professional support and a due-diligence checklist in place? Do they have a timetable for any deal?

Are you serious?

Henry, however, cautions owners not to be too suspicious.

“There are not many firms pretending to buy just to garner information,” he says. “If there are then they will probably be known in the industry already. I’d advise not to be too searching at the initial stage because the buyer might just disappear. For example, asking for the buyer’s financial statements and detailed deal structure would tend to come at the next stage, once you have had the initial high-level discussions to establish compatibility.”

Richard adds that owners must also carry out a ‘seriousness’ test on themselves. “Stop and think about your own personal circumstances,” he says. “Am I at a stage where I want to sell or indeed can afford to sell? Is this right for the business?”

Seek advice

Owners can carry out all these processes themselves but often securing professional advice from a broker can be helpful.

“It is very difficult as a business owner to get this right yourself,” says Richard. “You need the skillset of people who have been there and done it. Brokers can hold your hand and help you avoid pitfall after pitfall.”

If you’d like support as you work towards an exit, talk to your St. James’s Place Partner


The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.

Investment in the ‘new normal’

Investors’ doors are still open, but the landscape has changed

Investment in the ‘new normal’

“The level of investment activity during the pandemic has surprised me,” says Rod Beer, managing director of the UK Business Angel Association. “While some angels have understandably backed off investing altogether or avoided some sectors, they have been replaced by others sensing an opportunity – particularly in sectors that are enabling digitisation.”

Even where interest has dropped off, such as in food-related sectors, there are success stories. Digby Vollrath, CEO and co-founder of Feast It, an online platform linking event hosts with suppliers (for events ranging from weddings to corporate conferences), says: “We had to deal with the question – why would anyone put money into a business dependent on face-to-face gatherings?”

But Feast It did raise money during the pandemic – a £1.2 million funding round in August 2020. Its story shows that investment is available, but to bag it, entrepreneurs have to be agile.

Deal flows recover

Data from SeedLegals1, a digital platform that produces the legal agreements for early-stage funding rounds, shows that deal flow suffered during the pandemic, but has very nearly returned to pre-lockdown levels.

In March, the number of new signed shareholder agreements dropped to 75% of the February level, rose to 120% in April (the usual seasonal tax year-end spike), and then fell off again in May and June to around 60%. Encouragingly, July saw a sharp recovery to a few points off the February level.

Also encouraging, says Nicholas Richards, head of investor partnerships, is that EIS and SEIS advance assurance applications – which are indicative of deal activity two to three months in the future – have recovered steadily since a March drop-off. Applications on the SeedLegal platform fell from around 25 per week to 10 after lockdown, but at the end of July were over 80% of pre-Covid levels at around 20 per week.

Rod does however caution that investments into companies raising money for the first time has remained low. He says: “Angel investing is a very personal thing; you want to look someone in the eye before you write a cheque. That couldn’t happen during lockdown and the opportunity to do that is still limited.”

Different sectors, different stories

Businesses that stand to gain from the pandemic, such as technology companies in the health and education sectors (health-tech and ed-tech), have benefited. The number of health-tech investments in May and June was around five times higher than average pre-Covid levels while the number of ed-tech investments in June was around three times higher. However, activity in both sectors returned to pre-Covid levels in July, so the jury is out on if elevated levels of deals will continue.

Rod also flags continuing strong investor activity in sustainable investments, such as green technologies, and growing interest in ‘deep tech’, which are companies that use highly advanced scientific or engineering innovations such as quantum computing.

Conversely, SeedLegals data shows the number of investments in the food-sector collapsed after lockdown with the number of deals falling by around 60% and remaining low.

Still raising money

But Digby’s experience with Feast It holds some valuable insights.

First, he had to convince investors about longer-term and medium-term prospects. Digby says that while no investor actually believed that Covid would spell the end of events, they needed reminding that Millennials had become the largest customer segment in the events industry, that this segment values experiences over possessions (so are more inclined to spend on events), and they are getting wealthier as they get older, so will probably spend more on higher-value events.

He also suggests that there is likely to be a rapid recovery: “We have had close to 100% cancellations because of the pandemic. But people haven’t reverted to weddings with six guests or weddings over Zoom, they have simply delayed their weddings. Next year is potentially going to be a bumper one.”

So, Feast It was able to present a bullish view over a five-year horizon, with an interesting opportunity over a 12-18-month horizon too.

Second, a dose of realism was important to build credibility. Digby says: “We were openly negative about the very short-term prospects. We projected zero revenue this year. That convinced investors we had thorough plans to survive a worst-case scenario, be ready for the recovery when it comes, and not need to come back to investors in a few months, desperate for money.”

Third, the financial deal had to make sense. Digby says it was almost impossible to value the company in the midst of such uncertainty, so Feast It structured its funding round as a loan, which converts to equity at the next investment round, with investors to be allocated shares based on a 20% discount on the price of that future funding round.

This was done in conjunction with using the government-backed Future Fund which matches private investor funding. This structure, he says, was fair and logical for both parties: “As a founder I am backing my vision and our ability to perform by the time we need to raise money again. If our next round is concluded at a lower valuation, then it really hurts us. But for investors, by coming on board now, they get a better deal in the next round of funding.”

And fourth, fundraising tactics had to be adapted. Digby says: “We started with existing investors. We ran webinars and provided them with detailed and brutally honest documentation on the impact of the pandemic and our plans to deal with it.” Many of these signed up quickly, which inspired confidence in new investors.

Rod thinks the start-up funding scene is relatively strong, but uncertainties remain. He says: “I think investment into digital businesses is very strong, driven in part by the forced adoption of technology by organisations. In other sectors, we don’t know how it will pan out. We’ll only get a clear picture next April, at the end of the tax year, which sees a peak in investment activity to qualify for EIS and SEIS.”

 

 


The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.

1 SeedLegals​​​​​​​ (4 August 2020)

Links from this website exist for information only and we accept no responsibility or liability for the information contained on any such sites. The existence of a link to another website does not imply or express endorsement of its provider, products or services by St. James’s Place. Please note that clicking a link will open the external website in a new window or tab.

Productivity and the pandemic

Now is the time to focus on strengthening productivity

Productivity and the pandemic

Many smaller businesses have successfully weathered the storm of the pandemic so far but no one can afford to let productivity slip in these uncertain times. Covid-19 has highlighted the importance of embracing constant innovation and agility for survival in business.

David McLaughlin, Chartered Fellow of the Chartered Management Institute (CMI) and Chartered Management Consultant, argues now is the time to at least carry out a “quick and dirty review” of the health of your business and make the changes to strengthen and improve productivity.

He says: “Keeping customers is more vital than ever, so you need to re-evaluate your business goals. Use social media, your website, technology and every feedback tool at your disposal to determine your customers’ needs and to see if you are meeting them in productive ways. Be prepared to drop products and services no longer wanted and offer different products and services where you can be more productive.”

Supply chain security

Of course, it’s vital to have a sound, reliable supply chain to maintain productivity, particularly when they’re based outside the UK. Dr Elaine Garcia, Senior Programme Leader at the London School of Business and Finance, recommends diversifying your supply chain as soon as possible. “It’s wise to identify and select more than one supplier for essential products or services as a back-up so you’re not left stranded if they let you down, or fold.

“In these volatile times you need to anticipate both shortages of products and potential surges in demand, so good communications with suppliers is essential to ensure that you can have what you need to remain productive.”

Employee engagement

Keeping employees engaged is vital too, Elaine argues. “A worried workforce is not a productive workforce, so you must keep them on board and informed on the direction of the business.

David Mclaughlin agrees that productivity and employee engagement are intrinsically interlinked. “Employees need to know what outcomes the business needs, how they can deliver them, and how they’ll be supported in that,” he says.

The main reason people are unproductive is usually poor management, so evaluate your management team carefully and consider providing coaching and training to help them get the most out of your workforce, many of whom may now be working in very different environments, remotely or from home.

Tech solutions

In the face of these new challenges, technology has an important role to play in improving productivity but this involves much more than giving everyone a laptop and asking them to work remotely.

Elaine advises: “Assess your needs and if technology can help increase your productivity, acquire it now. At the same time, see what you can access quickly, free or cheaply, particularly social media. For example, use Facebook to provide automatic answers when people message you, learn google analytics, exploit cloud systems and instant messaging, and make more effective use of phones and tablets.”

Entrepreneur Ben Michaels, MD of digital marketing agency ThinkEngine, has found that cloud-driven business chat software combined with project and task management software has improved internal productivity of his business during the Covid crisis. “Chat software replaces email, internally and with clients and business partners, who really like it. Chat is more immediate and responsive and has speeded up communications, leading to a 25% reduction in time spent emailing.

“Task management software allows us to manage projects in a collaborative way, improving efficiency by keeping projects moving at a greater rate, enhancing the overall pace of work by about 15%.” Both technologies fit together neatly to provide a joint productivity boost.

Summing up, he says: “Entrepreneurs should always be looking ahead to embrace the next new technologies that will make them more productive in the face of unforeseen challenges like Covid.”

 


The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.

Reacting to unsolicited offers

What should you do if you receive an unexpected offer to buy your company during the Covid-19 crisis?

Reacting to unsolicited offers

Despite the Covid-19 crisis there are still acquirers out there with cash on their balance sheets, and with bank interest rates low they are looking for companies to buy that will bring them a better return. While the pandemic offers them the opportunity to drive a hard bargain and pick up small firms for a relatively low price, they don’t hold all the cards when it comes to a negotiation and you can still get the deal you want if you know how to go about it.

If you get an unsolicited offer it can be flattering, says Andrew Shepperd, a Director of Entrepreneurs Hub, which advised on two recently completed sales. But with the initial approach the buyer may already have seized control of any negotiation because they will be the only ones in the running, and if you want to take the opportunity to sell you may need to redress the balance by seeking out more potential purchasers.

But before you make any decisions be patient, listen to what they have to say and sleep on it. Then, if you decide to take it further find advisers who can guide you through the process and may even be able to identify other potential buyers. Andrew explains: “We’ve found that often those unsolicited approaches seem decent but on review, and with the context of a proper market process where you get other interested parties, the consideration can double, or even quadruple.

“There are some very, very good serial acquirers out there that are proactive and what they want to do is deal with the seller directly without advisers because they’d rather not be in a competitive situation where it may be harder for them to achieve the best terms or the lowest price. What you find is the value that people will often pay in a competitive situation will be higher. So, the initial offer may be £2 million but when you bring another potential acquirer in it may go up to £4 million.”

Know your acquirer

Another Entrepreneurs Hub Director, Malcolm Murray, explains that there are also organisations now offering courses on how to buy a business without spending any money and says that offers of this sort, which are often funded from seller assets and seller future receivables, can be low value for the seller and in effect the seller is funding their own purchase. He says that you should find out who your potential buyer is before proceeding and if you are comfortable, get a non-disclosure agreement in place. You should create and supply them with a sales document that provides them with a future value of the business, so that they can make an initial offer. You only need to enter into a formal due diligence process if that offer meets your expectations. It is much better to get an advisor alongside you in the process.

Nigel Fox, former Chief Financial Officer of Avanti Communications, now advises SMEs with business growth advisors Elephants Child. He agrees that entrepreneurs should avoid a knee-jerk reaction to an offer. He says: “My advice to anyone receiving an unsolicited offer would be to acknowledge it, say that the business isn’t currently for sale but you are open to a strategic discussion and suggest a follow-up conversation. That puts you in a position to take a deep breath, consider it.

“The vast majority of businesses, with some notable exceptions, will be to some extent distressed. They will have had to furlough people, work remotely and work in a different way. Some will have had capital structure issues in terms of cash flow and therefore a smart acquirer with deep pockets will say ‘now’s the opportunity to see what we can pick up on the cheap’. Cheap may only be 10% or 15% cheaper than they would otherwise have been able to buy the company for but that’s a significant amount if you are a business owner.”

Due diligence

He agrees that you should do your own research to understand who the acquirer is and whether they really are likely to complete a worthwhile deal. Once you’ve done that you should set up a data room, either physical or virtual, where the buyer can access the information they need for their due diligence. However, he says that some approaches are made by competitors with no real intention to buy, who just want to gain information about your company, so acquirers should be given information in stages with sensitive details only made available late in the process.

Nigel adds: “If you agree a sale, you’ll need your accountants or tax advisers to make sure that your exit is structured tax efficiently. This is the sort of thing that business owners tend to forget about. They might agree a £10 million sale but they don’t realise that without proper tax planning it might only be £4 million in their pocket because they haven’t done it properly.”

This is a worst-case scenario and it is unlikely to be so extreme. However, good advice when you are valuing and selling your biggest asset is essential and should more than pay for itself, says Andrew. 

If you need support through a sale, talk to your St. James’s Place Partner.


The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.

Exit Strategies may include the referral to a service that is separate and distinct to those offered by St. James’s Place.

Adapting to the new environment

Graeme Quar, Entrepreneur-in-Residence at the University of Portsmouth, explains how you can thrive by pivoting your business model

Adapting to the new environment

The Covid-19 pandemic and the dramatically altered commercial environment have been a shock to entrepreneurs but there are plenty of opportunities in the ‘new normal’. There are new products to be made, digital sales channels to exploit, government grants to take advantage of, and a wave of money from families who weren’t able to spend in lockdown and who had earmarked thousands for now-cancelled foreign holidays.

Perhaps the most obvious way to take advantage of these opportunities is to pivot your business model to offer something new. Consider, for example, how companies like Dyson rapidly developed new ventilator designs in the early days of the crisis. These may not now be required but demand for products like Perspex screens to protect shop workers from the virus has soared. And Hotel Chocolat increased its annual revenue by 3%1 after ramping up its online sales during lockdown, reducing the online product range and introducing pre-selected bundles so that its distribution centre could handle the surge in demand.

Graeme Quar, Entrepreneur-in-Residence at the University of Portsmouth, also helps small businesses grow and thrive through his work with business growth advisors Elephants Child. He says: “I think most good businesses are very focused. They find their market and their customer base and they exploit it well. Now, some are finding that their customer base has disappeared, so they need to sit and take stock and say ‘what have we got here, and could we use this talent or these assets in a different way?’

“If you think of a manufacturing company that carries out injection moulding. They may be making a particular mould for a particular type of product but actually, what the economy wants, is a different type of product. It may not take that much to rejig the machinery. The staff on the shop floor and the engineers have probably got the skills to adapt to do that.”

Beyond manufacturing

But it’s not just manufacturing companies that are pivoting their offerings. Graeme is a non-executive director of a company that operates a research laboratory that has switched its operations to meet the demand for testing linked to developing a vaccine. And while the entertainment industry is suffering, Elephants Child works with a production company that switched to filming broadcasts for social media platform TikTok when the crisis caused normal production to stop.

Sales is another important area where companies can modify what they do to improve their performance through the pandemic. Graeme says that salesmen and women who used to getting in their cars for face-to-face meetings need to learn to sell on Zoom. One business he is involved in was used to picking up leads by attending exhibitions. Yet its sales are improving without a sales rep on the road because it has adapted to working online.

“I also have a business friend who owns vape shops,” he says. Rapidly he’s gone from zero to 32 units in two-and-a-half years. He had already begun wondering how efficient the shops were and whether he should build up his online business. But he said he would never have dared to close down every single unit to test out the online market, but the government made him do it. And, of course, he’s discovered that online sales are really quite interesting.”

Government support

And companies shouldn’t overlook the opportunities offered by ongoing government support. It has been keen to help small businesses through the crisis and Innovate UK has already handed out £210 million2 in continuity grants to businesses it was supporting prior to the crisis and has several other support packages.

Graeme adds: “I’m also the NED of an R&D business. It actually has no customers because it is still developing the product but we managed to raise additional funding through Innovate UK. Because of Covid, the government has been handing more money out more quickly and that has accelerated our development process. We won’t be going to market for another year but we’ve actually recruited.”

And while there are many ways to pivot or accelerate your offering, you should do your research carefully because many consumers currently have a lot of money to spend. Graeme points to the opportunity offered by the pent-up demand from families stuck at home for months and forced to abandon their summer holidays, and the need to meet their demands. He says: “That £5,000 trip to Disney has been cancelled, so what are we going to do with the money? Builders are getting busy, for example, because we are spending our money on new kitchens or extensions.”

The Government has also inspired consumers to spend, perhaps most notably through its Eat Out to Help Out scheme but also through a temporary reduction in Stamp Duty Land Tax, which is helping to revive the housing market.

Martin Brown, CEO of Elephants Child, explains: “My sense is that there is an opportunity for the vast majority of SMEs, if they are prepared to step back and think and get their strategy and their plan right.”

If you need help to adapt to the ‘new normal’ talk to your St. James’s Place Partner.


The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.

Sources:

1. Hotel Chocoloat trading update, 21 July 2020

2. UK Business Angels Association, 19 Mary 2020

5 steps to scaling up fast

The Covid-19 pandemic has battered the UK economy, but some businesses continue to grow fast

5 steps to scaling up fast

The Covid-19 pandemic has stalled the growth hopes of thousands of UK businesses. According to the Future of Growth Capital report, published in August 2020 by the ScaleUp Institute, Innovate Finance and Deloitte, over 70% of fast-growing scale-up companies are now in sectors most affected by the lockdown such as construction and retail.

But not all owners are on their knees. There have been crisis winners including, online retailers as shoppers shun the high street, and health tech firms helping to fight the virus.

One firm not being handicapped by the pandemic is Play More Golf, which links up with UK golf clubs to offer less expensive, flexible membership for players. Since launching in 2016 it has scaled quickly to partner with 250 clubs, attract 10,500 members via its app and doubled revenues year-on year to £4 million.

Crazy increase

When courses closed in March, we quickly offered people extra time on their membership to stay,” explains founder Alastair Sinclair.  When we got to May and golf was one of the first activities to re-open we got a crazy daily increase of enquiries of 1,500%.”

Another firm which has continued to flourish is Remedy Health, which produces and sells bespoke 3D printed nutritional food online. Founder Melissa Snover says its first product – Nourished – has recorded 30% month on month growth since lockdown. There is a bigger focus on people getting healthy,” she says.

Both firms are determined to keep scaling in the months ahead. Play More Golf aims to once more double revenues this year as the recession hits and golfers seek cheaper playing options. It also aims to expand its product internationally into Spain, Portugal, and France next year and launch new white-label products to attract more luxury golf clubs. 

Focus on R&D

We are working on our software and new R&D to ensure we can meet the demand,” Alastair says.  “But scaling is also about being nimble and listening to your customers needs. Its a rapidly changing marketplace.”

Melissa is also continuing to scale and expects 500% revenue growth this year. The expansion includes launching a new kids range this Autumn using its patented technology. We listened to our customers saying their kids would love it and we are delivering,” she says.

Paul Excell, managing director of the ScaleUp Group, says Alastair and Melissa are following many of the key scaling up steps vital in troubled times.

One main area is focusing on cashflow and capital and securing finance to fund investment. Every pound counts in marketing, sales or customer acquisition,” he says. You need to maximise recurring revenues and look at streamlining your processes to be more efficient.”

Obsess over customer needs

Paul also emphasizes the need to ‘obsess' over customers both existing and new. “How are your customers feeling, what do they need to be successful, are your delivering your promise? Plus, how can you develop business processes, models, product portfolio, and people to cost effectively address  new growth markets and customers?”

Indeed, start-ups should create a strategic plan with clear growth targets and communicate it well with all functions and departments to ensure they are on board with it. They should also identify any skills and knowledge gaps in their teams and invest in training.

But a growth plan is not enough. Execution is key. Owners need to build a scale-up collaborative growth and delivery culture throughout their organisation.  “Lead by example and inculcate a supportive, empathetic growth mindset, cause or purpose within your team and partners. Your people should be getting up in the morning ready to face tough challenges and enjoy their successes,” says Paul.

Melissa agrees that the team is crucial. “We hire executive level people who buy into our way of thinking,” she says. “They are very experienced in their individual field, so I let them go away and run with it. At the speed we are growing you can’t expect to know every detail. I’ve never been in such a fast-moving business before, but we keep getting stronger.”

5 key steps

If you think you’ve got an offering that is likely to be in demand through the current crisis, here are five steps to scaling up your business so that you can take advantage of the opportunity.

  1. Identify customer needs and new market opportunities
     
  2. Make the most of new technology
     
  3. Fill in knowledge gaps by training or hiring
     
  4. Build a culture focused on growth
     
  5. Always keep an eye on cashflow

If you’d like to find out more about scaling up, speak to your St. James’s Place Partner.

 

 

 


The opinions expressed by third parties are their own and not necessarily shared by St. James’s Place Wealth Management.

Funding in the age of Covid-19

With so much coronavirus uncertainty, investors may be even more careful about where they put their money. So where should start-ups be looking for capital?

Funding in the age of Covid-19

The Covid-19 pandemic has been a shock to start-ups that previously had a reasonable expectation of being granted loans or raising capital from investors. At this critical stage of the business lifecycle an injection of cash can be essential if a company is to get its products and services to market and realise its full potential.

Since the March lockdown sent the economy into a tailspin, however, investors are being forced to consider much more carefully where they invest their cash. Some have seen the value of their existing portfolios plummet and now have less resources to draw on. Yet options remain for those entrepreneurs that can demonstrate they have a really promising proposition and here we’ve considered the likely sources of funding available today.

Government loans

Government-backed loans have been introduced to help businesses. Three schemes are available through a range of lenders and partners accredited by the British Business Bank:

• Coronavirus Business Interruption Loan Scheme – loans up to £5 million for SMEs

• Coronavirus Large Business Interruption Loan Scheme – loans up to £200 million

• Business Bounce Back Loan Scheme – loans up to £50,000 for SMEs.

However, many promising start-ups operate at a loss in the early days, which has meant that they have been unable to access these loans. A fourth scheme, the Future Fund, delivered directly by the British Business Bank, is aimed at them. It is open to firms that have raised at least £250,000 in equity investment from third parties in the past five years. Loans of up to £5 million need to be matched by private sector investment and will convert into equity unless investors choose to repay the cash.

By mid-July, loans totalling £45.3 billion1 had been delivered by the four government schemes – something that is “obviously a positive”, says Crawfurd Walker, Revenue Officer for business growth advisors Elephants Child. But he adds that companies’ experiences of these schemes have so far been varied.

Investors looking for deals

Away from government loans, Crawfurd says the investment environment is “a bit more risk-averse”, but stresses there is “still money to be invested and people are still looking for good deals”.

The challenges of Covid-19 can even be a positive for start-ups pitching for funding. Crawfurd explains: “Angel or venture capital investors want to see that management have been proactive during the pandemic – either by controlling cash or by showing agility in rejigging their business model to reflect what’s happening in the marketplace. Show evidence of that and it will give investors confidence.”

Start-ups from sectors like technology, healthcare and infrastructure are more attractive, but all investors have the same essentials on their ‘shopping list’: a good proposition, a good business model and a strong management team.

Crawfurd believes investors with existing portfolios are prioritising the injection of money into businesses in which they already have a stake. But for other investors, the pandemic is an opportunity to invest in companies they haven’t had access to before. “Not only do these companies suddenly need funding, but the value will have taken a knock because of pandemic uncertainties,” Crawfurd says.

For early-stage start-ups, investment from family and friends remains an important option, but because of the higher potential risk, this will likely mean sacrificing a higher level of equity. Funding is also available through crowd sourcing, bank term loans, property-backed lending, asset finance, invoice finance, merchant cash advance on credit card transactions, and working capital loans.

Shift in attention

Dr Neil Garner is founder of physical-digital payment platform Thyngs, which is successfully raising funds through crowdfunding platform, Seedrs. He says: “We’ve seen first-hand that there is still appetite from investors for the start-up community. But there has been a noticeable shift in attention, as it’s those start-ups that are making a difference during Covid-19 that are catching investors’ eyes – specifically, businesses that are becoming increasingly relevant in a Covid-19 era, and are working towards helping good causes and making a tangible positive social impact.”

Craig Hewitt-Dutton, Partner at corporate finance firm LockDutton, agrees investment in start-ups continues despite Covid-19. And he reminds investors: “Obviously every investor has their own risk profile but if they were to look back at 2008, another challenging period, a large amount of the investments that they made then would have produced exceptional returns.”


The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

1. British Business Bank

Learning from the financial crisis

Lessons from the 2008 crash can be helpful if you’re considering exiting or acquiring a business in today’s pandemic-impacted world

Learning from the financial crisis

The impact of Covid-19 on businesses is often said to be as hard-hitting as the global financial crisis of 2008. In fact, the two are quite different in nature but if you’re exiting a business there’s plenty you can learn from hindsight.

“The 2008 crash was like a cliff-drop for businesses,” says Sue Green, Director at Watersheds Corporate Finance, “because there was a fundamental problem with the global economy itself.” After the crash business confidence was totally shattered across all sectors, banks completely stopped unsecured lending and potential acquirers simply sat on their capital afraid to spend it.

Consequently, exiting became nearly impossible and deals that did get off the ground were largely dependent on private equity companies risking their own money, and involved very deep and lengthy due diligence processes. It took two years before a semblance of normality returned to the market.”

Hope for exits

“In contrast, if you’re looking to exit today and play your cards right, there are reasons to be positive,” argues Sue, whose firm has recently completed two successful deals in the aggregates and online retail sectors. For a start, the impact of Covid-19 isn’t due to a fundamental global economic fault, nor has there been a total cliff-drop and, although business confidence has been knocked in some areas, it hasn’t evaporated.

In contrast to 2008, Government support has shielded both buyers and sellers from the worst economic impacts of lockdown. Enterprises have been financially supported by a range of interventions, including loans – such as CBILS – business rate support grants, furloughing and other schemes. Furthermore, while lenders are understandably cautious, some are still making money available to fund deals.

Sue adds: “Deals will progress more slowly of course and be highly sector dependent. Companies supporting health, infrastructure or the distribution sectors, for example, are perceived to be doing well, while restaurants and those involved in live entertainment have suffered badly.” This means that unlike 12 years ago, some businesses remain highly sought-after acquisition targets and while some have suffered worse than others the underlying sentiment is more positive.

Lessons learned

“As we discovered in the 2008 crash, if you’re looking to exit, you should start planning the process as soon as you can,” says Sue. “The earlier you begin the greater your resilience and flexibility to act when circumstances change – don’t just wait for things get better or you’ll probably miss your opportunity.”

While not as twitchy as in 2008, buyers, banks and other funders are still nervous about how much financial risk they’re prepared to take and will want to carry out very strict due diligence. “That means you cannot simply window dress your business,” says Sue. “Take a hard look and ‘kick the tyres’ to identify and remove – or mitigate – any potential problem for buyers or funders up front. At present, even a smaller issue down the line could destroy confidence in the deal.

“A buyer will want to see evidence of stable and sustainable profitability and growth coming out of lockdown. Ensure you’ve got a sound business plan, financial projections, cash and balance sheets and profit and loss records in place.”

Previous recessions have also taught us that strong and decisive leadership is valued by acquirers, so what you do now could be even more important when a buyer comes knocking. They will be impressed if you understand and can demonstrate how your enterprise is going to recover from crisis.

“Clearly, it’s easier to exit if you’re in a less badly hit market, but whatever sector you operate in you will face arguments from buyers to drop the price because of the ‘climate of uncertainty’ and claims that they need to de-risk their financing package,” explains Sue.

Buying opportunities

If Covid-19 now means this is not the moment for you to exit but you have a strong balance sheet, you could unexpectedly find that this is the time to become an acquirer yourself to strengthen and increase the value of your business. There will be good businesses that are seeking a cash injection right now to get them through the pandemic and others that simply need to exit.

Some owners close to retirement may not want to wait until the situation improves before exiting. “If you’re prepared to put in the working capital and do what needs to be done, you could end up with a very strong business,” Sue concludes.

If you are planning an exit or acquisition, get in touch with your St. James’s Place Partner.

 


The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

Recruiting remote workers

As Covid-19 forces changes to the way companies operate, how can you integrate new colleagues into the team when they are working from home?

Recruiting remote workers

When you’ve hired a new Financial Controller, you don’t usually expect your first face-to-face meeting with them to be on a park bench and at a distance of two metres. But these are strange times and when home security business SimpliSafe decided to carry on recruiting after lockdown to meet the demands of its growth strategy, the process was always likely to be unconventional.

SimpliSafe is a home security business founded in the US. After receiving backing from private equity firm Hellman and Friedman in 2018, SimpliSafe expanded into UK, with a total of 18 employees who were working out of a shared office in Manchester (the company signed a lease on a new office during lockdown). Launched in April 2019, the UK business grew through its first year and was planning to expand its team when Covid-19 forced the country into lockdown.

SimpliSafe’s UK General Manager Jonathan Wall explains: “We already had a few people in the recruitment process and we weren’t going to stop. So, we took on a Senior CRM Manager, a Senior CRM Executive and, of course, a Financial Controller. Those people needed to be inducted and they all started after lockdown. Initially we thought that was going to be our biggest challenge but we have a headquarters in Boston, Massachusetts, so we were already quite used to remote working and having people on Zoom. It was more about making them feel comfortable and part of the team.”

The company encouraged colleagues from across the business to contact the new hires, welcoming them on board. In addition to regular team meetings, SimpliSafe also arranged virtual social events to make integration easier. They hired a personal trainer to give virtual fitness session on Wednesday afternoons and held a quiz every Friday. Jonathan finally met his Financial Controller in person in May. They held their first face-to-face meeting on a bench in Salford Quays but by this time they already felt they knew each other well.

Recruitment challenge

Kristen McNamara, Senior Director of Staff Development & Talent Acquisition at recruitment agency Robert Half says that while companies can do much to achieve similar successes, recruiting at the moment requires them to first identify candidates who are self-directed, motivated, flexible and able to deal with the new ways of working. She says: “If you hire somebody who is looking for direction, looking to be told what to do and what the next step is going to be, that’s probably not going to end well. So, during the interview process it’s important to interview for that agility and mindset.”

Claire McCartney, Senior Policy Advisor for Resourcing and Inclusion at the CIPD, adds that once a candidate has been chosen, the challenges of onboarding them are two-fold. Initially, there are the practical issues such as making sure the new employee has access to the right IT and knows how to comply with data protection principles. Then there is a need to give them a clear sense of purpose and, as SimpliSafe found, to integrate them with colleagues they may have never met.

On the practical side, Claire says that HR or payroll documents should be sent via legally binding platforms like DocuSign or HelloSign. And employers should also make sure that the new hire has checked with their mortgage provider, landlord, local authority or home insurer that they are allowed to work from home. Companies should also check that their insurance covers business equipment in the employee’s home and send new hires an electronic health and safety questionnaire as part of their risk assessment.

Integrating new hires

Kristen adds: “I would recommend really articulating and defining the contribution the new hire is expected to make and the impact they will have on the business. We also recommend that as soon as you know you are going to be hiring somebody, you assign them a workplace mentor. It should be somebody who’s not their boss, who the new hire can call and say ‘what does this acronym mean?’ because the employee is not going to want to look vulnerable to their line manager.

“They should receive a welcome email, so that when they receive their laptop they can get in and they can see the emails from their teammates. I would also suggest that when they go into their calendar on day one, they can see meetings. They should be able to see a meeting with their line manager, one-to-one introductions and time blocked out for training, so it feels very deliberate.”

Both Kristen and Claire agree on the value of less formal interactions, such as virtual coffee breaks, that help to integrate new people with their colleagues. Kristen, whose own team work remotely, even has an informal dog walking group and has informal chats with staff while they are all walking their dogs.

With remote working likely to become much more prevalent, all companies should consider how they will welcome and integrate new employees. And Claire adds: “Obviously, the last thing you want after you’ve invested in them is for them to leave because they don’t really know what they are doing and don’t feel supported.”


The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

Thriving through a recession

Former KPMG Chief Restructuring Officer Stuart Lawson used to help some of the country’s biggest businesses overcome tough times – now he does the same for SMEs. We asked him for advice on navigating a recession

Thriving through a recession

There hasn’t been a significant recession since the economic crash 12 years ago and many SME’s have never experienced a serious downturn. While the impact of Covid-19 has already been a shock and the prospect of a prolonged recession and possible further lockdowns may be daunting, there are steps you can take to navigate this new environment and emerge even stronger.

The very first thing you need to do is manage your cash position. That means forecasting three months ahead and updating that forecast every two weeks so that you are clear about your sources and uses of cash. You should consider different scenarios and be conservative in how you think your market and customers will respond to a recession. When forecasting forward make sure that you have no hidden tax bills or VAT liabilities that will be difficult to manage. Also assess whether you can strengthen your balance sheet with an equity raise or refinancing of existing debt at better rates.

You should also consider other sources of cash, such as debtors and stock. Stuart Lawson, who now works as a Business Growth Advisor for Elephants Child, says: “I’ve talked to one company with a debtor book running out to 200 days. They’ve been very supportive of their customers, who haven’t really been paying regularly or to terms. Focus on turning overdue debtors into cash, manage customers to terms and make sure you aren’t over-exposed to one major debtor.”

Strategic response

Once you have a clear view of your sources and uses of cash you can begin to think seriously about your strategic response to the recession. It can be a time of opportunity for businesses that embrace the ‘new normal’, re-focus their energies and resources and set new priorities. It’s no coincidence that some of the world’s most dynamic businesses were started during recessions, including Microsoft in 1975 and Airbnb in 2008.

Stuart says: “Take the opportunity to pivot or change your business model. We have seen many examples of businesses doing just that recently, such as restaurants that have successfully developed takeaway services or dine-at-home packs. This is a chance to rapidly introduce new products and services or to re-engineer old ones for the new commercial environment.

“Continue to focus on growth and strategic intent. There may be cheaper M&A opportunities during a recession and you can improve your chances of thriving if you act aggressively to capture market share during a downturn, rather than waiting for the recovery to begin. Acting with purpose and speed may also mean more aggressive restructuring and changes to your product and trading portfolio – right sizing for the future.

But it’s not all about seizing new opportunities, says Stuart. There will be longer term benefits if you focus on customer value and support. If you help your best customers now, they will be in a position to reward you when the economy recovers. This is also the time to review your supply chain and bring a renewed focus to managing margins by renegotiating key supplier relationships and contracts.

Showing leadership

However unpalatable, there may be a need to re-assess staffing levels, but even if there have been changes you have to maintain productivity and efficiency and that means keeping your team on-side. Stuart adds: “You’ve got to make sure you keep the right skills to maintain performance. You can’t have any performance drift and that comes down to the leadership role. You’ve got to create an environment where there’s some positivity and certainty because you don’t want people coming to work suddenly feeling like there’s no point.

“So, you’ve got to maintain the alignment and motivation of the teams even in difficult circumstances. A business leader is responsible for four things: strategy; tactics, leadership and followership. The leader of a small business sets the strategy. You are also providing leadership and making sure that everybody in the organisation knows where the company is going, what it’s doing and what’s expected of them.

“You also need to create an environment where everybody feels that everybody has an equivalent level of challenge. And the last thing is this notion of followership. So, the employees have got to believe that you know what you are doing and where you are going.”

Leading your business through a recession is challenging but when you come out the other side you should be more resilient, more agile and better able to meet the challenges of the years ahead.

 


The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

Is your office too big?

Your office requirements could be permanently altered after the pandemic

Is your office too big?

The onset of Covid-19 forced most companies to swiftly move their operations out of the office. After a few initial teething problems, it has transpired that, for many, working at home has been a smooth process. People have quickly adapted to using software such as Teams, Google Hangouts, Zoom and Trello, with productivity in many cases rising and quality of work unaffected.

But with many countries now starting to lift lockdown restrictions, what will the return to the office look like? Social distancing means we can’t return to business as usual. As working from home has been so successful, will companies decide to reduce the size of their workspaces, or even not return to the office at all?

Lewis Beck, EMEA Head of Workplace for CBRE, a real estate services and investment firm, believes that many companies will look to change their office space following the pandemic, with some even needing to increase their office footprint, following a long-term redefinition of maximum occupancy. He says that we are likely to see a “rationalised physical footprint, made up of a different composition of space that is higher quality and better-equipped to support employee needs”.

Lewis adds: “The shift we envisaged towards a more fluid workplace anchored by a high quality headquarter space and supported by a network of smaller locations will become a reality more quickly than anticipated pre-Covid-19.” 

Renegotiating a lease

But if you’re in the middle of a lease agreement, will it even be possible to make significant changes to the amount of space you have – and pay for?

In the current circumstances, your landlord might be open to renegotiation talks, but Steven Porter, Head of Commercial Property at JPC Law, points out that if a landlord refuses to negotiate revised terms, there is no legal mechanism at present to force the issue. If permitted in your lease, subletting could be an option, if a subtenant that is acceptable to the landlord can be found. “Early dialogue is key,” says Steven. “Most importantly, if an adjustment is agreed with the landlord it is essential that it is documented to avoid any future misunderstandings.”

Estate agency and property consultancy Knight Frank says it has not seen many companies looking to downsize or renegotiate their leases so far, unlike in the aftermath of the 2008 financial crash when many businesses sought to get rid of office space.

“There’s certainly been a lot of talk about the ‘death of the office’,” says William Matthews, a partner in the capital markets research team at Knight Frank. “But I think in the long run people do want to go back to the office – maybe not sticking rigidly to five days a week as we might have done before, but I don’t think it necessarily means we’ll need less office space.

“Before the pandemic, we all built up a degree of social capital with our colleagues, and without a central office where people can come together, this social capital could be eroded over time. So, having an office is almost even more important in the long run than it was in the past.” He also points out that having an office space that is appealing to employees will continue to be important in helping to attract and retain the right staff.

Changing spaces

Rather than moving away from offices altogether, William thinks firms will start to focus more on certain aspects, such as office location. Many employees will want to minimise their journeys into work, so employers might want to ensure they are located close to major transport hubs. And he suggests that firms might look to lease flexible spaces on the periphery of larger towns in order to limit their employees’ commuting time.

But overall, keeping an office space – albeit possibly a smaller space than previously – still has much to recommend it, he says. “When it comes to innovation and thinking about new business and products, it’s harder to do that when working from home,” says William. “Often people do need to be together to do more interesting, innovative work. That, for us, is a key facet of what an office can and should provide.”

Even if you do decide to return to office-based working, Lewis suggests that open-plan offices may need to be reconsidered to some degree. Companies could “compartmentalise”, creating a mix of open and enclosed spaces that will assist with limiting germs’ spread.

“Occupiers will place a stronger emphasis on building specifications and healthy workplace features as they focus on employee health to preserve long-term productivity,” says Lewis. “Long term, we’ll see a preference for buildings with ‘healthy’ credentials related to indoor air quality and ventilation, as fresh air reduces the spread of airborne germs. Currently, buildings are required to comply with a minimum 20% fresh air intake, while some choose to exceed this requirement by going up to 30%. Revisiting the minimum requirement may be a next step for facility operators.”  

If you are planning to bring staff back into the office in the medium term, it may not be possible for all your people to return to work at the same time. You should consider putting a one-way system in place, introducing phased occupation and shifts in order to ensure staff are spaced at a suitable distance from one another, and ensuring santation products are available.

 Covid-19 is changing the way we think about work and entrepreneurs may have to think more flexibly about their physical spaces and staff working to take advantage of opportunities in the post-covid environment.


The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

Marketing through a crisis

Why start-ups need to find new ways to reach customers

Marketing through a crisis

Start-ups have been forced to reconsider how they can get their products and services under the noses of customers during the Covid-19 crisis. Marketing has never been more important for new entrepreneurs but everything from the channels you use to the tone you take must be carefully considered during the pandemic.

While you probably don’t have the resources for a major television ad campaign, many marketing success stories during the crisis have been achieved with minimal advertising spend. Cos Mingides, Founding Partner at London advertising agency True, cites snack brand Emily Crisps, which turned around what could have been a disaster – a debut outdoor poster campaign that was scheduled to launch just as lockdown hit – by introducing gently self-mocking copy highlighting their unfortunate timing.

“Social and content marketing have a role to play, particularly for a service brand,” Cos says. “Make yourself useful to your customers, make sure your content is supportive and empathetic, and be generous with your expertise. If you’re being forced to make decisions that will have a knock-on effect on your customers, be truthful. Consumers understand that times are challenging, and they respect honesty.”

Getting social

You could consider a paid for social media advertising campaign, which can be targeted at the customers you want. This has the advantages of reaching the right people and offering a measurable return on investment, and you only pay when someone clicks on your advert, which should make the whole process of reaching new customers more efficient. The important thing is to consider which social platform your customers are likely to be using. An average consumer might favour Facebook, for example, while a business contact might be best reached on LinkedIn.

It’s important to remember, however, that in the current climate your content and your advertising must be appropriate and sensitive. In March, no less of a marketing giant than KFC was forced to pull a major television commercial. The ad played on the brand’s long-serving “Finger lickin’ good” slogan, showing close-ups of diners savouring the flavour of their fried chicken by licking their fingers, and their companions’ – this at a time when public health messaging was strongly urging all of us to wash our hands and avoid touching our faces.

KFC wasn’t the only company to find its marketing and advertising strategy impacted by the unfolding crisis. The fast fashion retailer ASOS stopped serving digital ads for face mask-shaped piece of chain mail jewellery. Norwegian Cruise Lines came under fire when its sales agents were instructed to encourage customers to purchase holidays to tropical destinations, claiming the virus could only survive in cold climates. Hershey withdrew ads showing people exchanging chocolate bars, hugs and handshakes.

Cos says: “This is a challenging situation. “We’re currently coming into one of the sharpest recessions on record, with huge uncertainty surrounding everything from supply chain to customer mood. Some companies are really suffering, and have had to cease trading. Some are falling into a passive mentality. Others are being entrepreneurial and innovative, seeing opportunities in the situation. However, the key principles of advertising haven’t changed: the more famous your brand, the better your chances of survival. So now is the time to invest in your brand.”

Weak sales shouldn’t be reason to cut marketing spend, Cos advises – but that’s a bold strategy to take at a time when businesses are scrambling to retrench.

There is a direct correlation between share of voice and share of market, Cos explains. If you increase your share of voice, your business will grow, he explains. But getting the message right is more important than ever – and more difficult – in a time of crisis.

“There’s a heightened sense of emotion among consumers right now,” he says. “And the key thing is not to be seen as opportunistic. In these unfamiliar times, consumers are finding comfort in the familiar, thinking of times when things were better. Aggressive, competitive ads aren’t connecting, whereas those that emphasise a sense of between-ness, connections on a human level, and local community are resonating.”


The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

Staying on course

While Covid-19 has changed many things, it doesn’t need to alter how businesses are valued ahead of sale

Staying on course

Exiting a business can be a challenging experience for business owners, even at the best of times. But for those wishing to leave their business in the next 12 months, the Covid-19 pandemic may feel like an additional hurdle.

“We’ve been working closely with our clients, some of whom are looking to grow their business ahead of exit and some who were ready to sell their business,” says Malcolm Murray, Managing Director of Entrepreneurs Hub. “In the first few months, most business owners were affected by Covid-19. Everyone was caught out, whether it was because of projects or orders going on hold, staff sickness, supply chain issues or moving to a working from home model.”

However, as the dust settles, he believes that few entrepreneurs should need to change their longer-term exit plans, in particular how they value their businesses. “For those looking to sell, nothing has actually changed,” he explains. “They still want to exit their business. The only thing that may have changed is their timeline.”

Henry Campbell-Jones, Managing Director, Hornblower Business Brokers agrees: “Many of the business owners we’ve been talking to have still been considering the sale of their business and feel quite positive about the future.”

Sector-specific challenges

While the pandemic has likely affected all sectors in some way or another, its impact hasn’t been negative for all.

“Some businesses that are looking to sell have continued to do well, especially service sector businesses and some engineering businesses whose customers are in the healthcare sector,” says Henry. “We’ve kept going with those sales and have had a reasonable level of enquiry for those.

“Others that have been affected have put the process on hold to address issues, such as furloughing staff or working remotely if that’s possible. They’re focused on getting through lockdown and coming out the other side.”

Malcolm adds that being ready to react as the pandemic develops will be key for some entrepreneurs: “Construction clients that were hit quite hard at first seem to be coming back quite strongly and are receiving a number of enquiries about new projects coming in. They’re building some momentum.”

Bouncing back

Malcolm says while Covid-19 has changed many things in our lives, all the measures of a valuation remain the same “There is no difference in valuing your businesses now than at any other time. No matter what anyone says, it is still on a return on investment basis. Buyers may look at a multiple of revenues or earnings before interest and tax or earnings before interest, tax and depreciation and amortisation.

“You still have to look at your profit, make your businesses as profitable as possible and make your profit consistent. Buyers will possibly be looking at the dip caused by this a little more sympathetically, but they’ll be keen to see how the company has responded and bounced back well.”

With this in mind, Andrew Lock, Co-Founder and Partner at LockDutton Corporate Finance says that for most businesses, the level of valuations should not change: “Good businesses going into Covid-19 are deemed by buyers to be good businesses coming out of it,” he says.

“Trade buyers, both in the UK, Europe and the US, are saying that if they see three to four months of trading back at the level a business was at pre-Covid-19, they are quite happy to make acquisitions based on 2019 performance. If you can get your run rate back up for three to four months then buyers are ready to acknowledge that.”

Henry agrees: “In presenting businesses to the market, we will still present their pre-pandemic performance as well as the future forecast. That sets the tone that we believe the business is going to recover and where we need to get to in terms of the valuation.

“However, for those businesses more affected by the lockdown, it may require a more structured deal where an amount is paid up front and an amount is deferred or contingent on reaching previous performance.”

Building value

And if businesses have been set back by the pandemic, how can they rebuild their value to pre-crises levels? Malcolm says that the businesses that are doing this well are the ones that have shown the ability to innovate and adapt quickly.

“If you look at restaurants and pub that have thought: “well, we can’t supply our usual service but we can do something else”. We’ve seen them quickly start offering takeaways and delivery services others supplying essential foods to local communities. They have been able to think creatively and it’s helped.

“Another thing businesses can do at the moment is drive sales and marketing. Many SMEs rely on word-of-mouth and repeat business. They don’t proactively market and sell their business. You can’t wait for things to come back; you’ve got to go out and win it back because if you don’t your competitors will be.”

If you’re looking to sell, remember that everyone is in the same boat at the moment and it’s how you react to the crises that be important to buyers.


The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

Back to work

As the government’s furlough scheme moves into its second phase, many businesses are looking to bring people back to work. Here are some points to consider

Back to work

Since the Chancellor of the Exchequer announced the UK’s furlough scheme – or the Coronavirus Job Retention Scheme, as it’s officially called – in March, more than a million businesses have placed staff on furlough, with a total of 8.4 million jobs having been protected under the scheme1. But it began a phase of winding down at the start of this month, which will end on 31 October.

As the scheme winds down, it gives businesses and employees the flexibility to return to work part-time, or for previously furloughed staff to work remotely, for any amount of time and any shift pattern. While this offers valuable time to prepare for returning to work, it’s essential that employers begin to plan early for the resumption of normal or near-normal business activity.

Uncertain times

Chloe Carey, a Business Growth Advisor for Elephants Child who supports business owners to achieve their strategic objectives with a particular focus on human resources, emphasises that many companies made the initial decision to furlough staff against a background of considerable uncertainty.

“Decisions around furlough were made on the basis of reduced amounts of business coming in, the risk to people’s health of coming to work, and the viability of working from home,” she says. “There was a great deal of uncertainty around how long this period would last, and people were waiting for three-week chunks of time to find out what would happen next. The government’s messaging is still changing daily, but the mood now is that if people are not able to work from home, they should be returning to the workplace if possible.”

In its guidance on returning to the workplace, the Chartered Institute for Professional Development urges businesses to meet three key tests before bringing their people back into the workplace: is it essential, is it sufficiently safe, and is it mutually agreed? In order to meet those tests, meticulous planning is needed.

“Businesses need to consider what they need in terms of resources to deliver against their order book, pipeline and new business,” Chloe says. “They should create an organisation structure to support that and forecast the cashflow incorporating the flexible furlough scheme, sanity-checking that the business can sustain these levels of staffing.”

Practical measures

The sector in which your business operates will have an enormous impact on the measures you need to take to ensure safely, as well as on the long-term viability of the business, says Chloe. “It’s a minefield to navigate the wider implications of social distancing and safety, but there are useful sector-specific guidelines and it’s essential that you stay on top of these.”

Whatever new structure your business arrives at, it’s essential to ensure that if possible staff are able to work from home, whilst doing as much as possible to rebuild team unity and collaboration.

“Communicate with staff as much as possible, talk through ideas, concerns, good news and bad news, and share plans as early as possible,” Chloe advises. “Implement informal discussions such as daily catch-ups or Friday drinks, and be as inclusive as possible to avoid divides between furloughed and non furloughed workers. Be mindful of practical concerns people may have, such as reluctance to use public transport, vulnerable or shielding relatives, childcare and other challenging domestic situations.”

More than feelings

It’s essential to consider the impact that furlough may have had on the morale of your workforce. Staff who have been furloughed may feel disconnected from their colleagues and the business, and anxious about having a job to return to at all; those who have been working throughout the crisis may feel resentful of their furloughed colleagues.

“Be ready for negative feelings and behaviours as a result of disparity from the impact of the pandemic,” Chloe cautions. “Ensure managers are skilled enough to recognise conflict and nip it in the bud, and make use of employee assistance programmes and occupational heath if you can.”

Depending on the size and nature of the business, there are various options available when bringing staff back to work. You may choose to reduce hours under the flexible furlough scheme, bring back some staff while others remain furloughed, or push ahead with redundancies if a reduction in headcount is unavoidable. In any event, communication is key. If working hours are to be adjusted, confirm the arrangement in writing. Give people reasonable notice if they’re required to return to work. And if redundancies are necessary, use robust selection criteria and follow correct legal processes.

“Commercial considerations are just part of the picture,” Chloe says. “This has been a challenging time for all of us, and some people may have experienced the loss of a loved one. Safeguarding the wellbeing of your staff is paramount.”


1 www.gov.uk, 29 May 2020.

The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

Winning business at a social distance

Being confined to our homes has created an unprecedented business landscape that is tricky to navigate. But there’s no reason to believe you can’t build relationships from behind a screen

Winning business at a social distance

When it became clear that we were heading towards a global pandemic, the thoughts of most business owners turned towards survival. This first stage was about cash or liquidity and then cutting costs and accessing government schemes to keep the business going. For those businesses that did survive, then came the second stage: how do you go out and win work when you have to stay in?

Speaking about the Covid-19 pandemic, UK Health Secretary Matt Hancock told the House of Commons, “This is a marathon, not a sprint”, and the same, albeit overused, analogy should be applied to winning new business in the current economy.

Regardless of any pre-pandemic plans, it’s going to be much tougher than expected to win new business. It’s a difficult market for everyone, and potential clients are particularly unlikely to respond to anyone who looks as though they’re trying to profit off the back of this crisis. Instead, use this time to build relationships that will create opportunities for the future.

“We’re not out there meeting new people, so people are returning to valued relationships that they have already built up. Go around everyone and ask, ‘How are you?’ Just share some comfort and support,” explains Richard Murray, Chief Commercial Officer at business growth advisor Elephants Child. “It may be a longer burn, but any good will you can engender will pay off in the long run, because people will remember you have reached out. So, get out there and talk to the people you know. Ultimately, that will be the best route to market at the moment.”
 

Open for business

While now probably isn’t the right time for a sales pitch, it’s important to let your network know that you are up and running. “The second part of that conversation can be making sure they know you’re still open for business and that you want to win more, because not everyone will assume that you want to scale up at this time,” says Richard.

Be sure to include the fact that being open for business means having adopted new processes that tie in with government guidelines and guarantee the health and safety of your employees. Your network needs to know that you’re responsible.

For the foreseeable future the days of networking drinks, shaking hands and exchanging business cards are behind us, which means winning a cold client is unlikely. Instead, focus on client referrals through your existing network. “Mentally, signing up to a new provider is a bigger step than it was six months ago,” explains Richard. “If people are doing business and want to take on new suppliers, they will want some sort of personal recommendation and testimonial.” He advises reaching out through existing clients, offering them a value exchange on services if they refer a friend who successfully signs up.

Richard also suggests leveraging your existing network by using them as testimonials. “If you have someone who’s thinking of using your service, introduce them to one of your clients. Let them talk about their experience of dealing with you, because that’s going to start to give people that reassurance.”
 

The new normal

Now is also a good opportunity to build brand visibility by offering complimentary webinars. Make sure they’re authentic and interesting, and encourage clients to bring people along. “It may not mean business tomorrow, but the value that you would get off the back of that is tremendous in terms of building those longer-term relationships that will turn into clients,” says Richard.

By now most people are getting used to this digital business environment. For many of us, speaking to clients and potential clients over video conferencing is the safest – and only – option, which means more and more business deals and negotiations are taking place online.

Video technology has enabled the creation of a virtual meeting space that’s not too far from a face-to-face scenario. However, it does make us work harder. Research shows that it’s trickier to read body language, it’s harder to engage, as most of us don’t look directly at the camera when we’re talking, and we struggle more with silences on video than we do face-to-face. But something as simple as moving further away from your camera, so hand gestures can be seen, can make a big difference.

In fact, using video instead of in-person interaction could actually be a positive. Video conferencing does have the benefit of being a considerably cheaper means to conduct negotiations than face-to-face meetings. And amid today’s economic uncertainty, perhaps that’s not such a bad thing after all. 

Business is looking different for everyone at the moment but you can thrive. Safety allowing, most of us would rather be out there, tangibly winning business in a way that we know works. But by strengthening your existing network, having the right conversations and utilising technology to have those conversations in the best possible way, you can build not just relationships, but pipelines and return to revenues.

 


The opinions expressed by third parties are their own and are not necessarily shared by St. James’s Place Wealth Management.

Thriving after lockdown

Martin Brown, CEO of growth advisors Elephants Child, considers how businesses can return to good health after the pandemic

Thriving after lockdown

In this article, I’ve looked at how businesses can thrive when they emerge from the coronavirus lockdown. And I’ve considered what entrepreneurs must do to take control of the six strategic areas for business recovery that make up the Thrive agenda: Team, Honesty, Revenues, Innovation, Velocity and the Environment.

Team

During lockdown you may have adopted new ways of working to keep your teams safe and motivated and these could provide the ingredients of success as things get back to normal. For instance, condsider the health and wellbeing issues related to reintroducing travel to work. Is it really needed or, more over, what is the right blend with office and working from home? Lessons learned through this difficult period can provide the foundation for a new and more resilient operating model. And it’s not just the way you work with employees that may need to change. Think about your relationships with other stakeholders, such as investors, suppliers and, of course, clients. Rethinking how you work with them could lead to a greater value exchange and richer outcomes from collaboration.

Honesty

At this moment of crisis, there is a real opportunity for you to demonstrate important leadership traits, starting with authenticity. Such traits can help you to increase the positive energy each time you engage with staff, clients and suppliers and will see you evolve as a competent champion. You should also show the foresight to pivot your business model as required to ensure your company prospers. Resilience will be needed, as will a large dose of pragmatism and humour. This, mixed with honesty, will galvanise your businesses for a greater future. Use the simple who, what, where, when, why and how framework to approach challenges and respond with outstanding solutions.

Revenues

As we emerge from lockdown there will be a need to quickly return to revenues. This has to be done while staying true to your purpose and aims, whether they are charitable, or community or commercially biased. You will also need to balance sensitivity with commercial reality. While providing support in tough times may have built relationships and sentiment, this should not be confused with the need for a strong value proposition. Acting quickly and making an immediate difference will give you the ability to retain and grow client revenues. New client acquisition equally needs to be a function of a rapid sales process and effective pipeline management.

Innovation

In the Covid-19 environment, innovation has been key to the survival and stability of businesses and sticking with this mindset will also allow you to thrive after lockdown. Think of some of the non-traditional collaborations we have seen in recent months, such as the Formula One teams joining forces with open designs, to manufacturer ventilators. Many entrepreneurs have rapidly got to grips with new technologies, such as Teams, Zoom, Google Hangouts and Sharepoint in recent weeks. Continuing in this same spirit by embracing big data, artificial intelligence and the internet of things should help you to improve and automate what you do and enable your business to thrive.

Velocity

To re-start or reimagine your business you will need the urgency and mindset of a start-up, and a focus on the marketing Ps of product, price, promotion, place and people. Use this period as a time to work ‘on’ the business, to refine your purpose and to take advantage of the lessons you’ve learned during the coronavirus crisis to inform your strategy for the future. If daily and weekly video calls have brought a crispness and clarity to the way your team works, how can you best apply this after the pandemic? And if your place is informed by digital and physical appropriateness, surely this will drive velocity and a stronger, quicker recovery.

Environment

An economist might argue that macro thinking and micro action on sustainability go hand in hand, so what does your business do to improve our world? And what does it do to protect and create jobs and increase profit (and pay tax)? As a business leader, these are things you can plan for. And in the post virus world they are likely to be high on the agenda.

So, what of the business-specific environment as Covid-19 recedes? Will a large office be needed? Could it accommodate social distancing? Do you need the cost, downtime and waste of excess travel? And what about the ongoing wellbeing of the team? How do these near-term issues drive organisational development now and for your future?

And can your annual operating plan be flexed if and when Covid-19 morphs into its next derivative? The notion of a robust yet agile plan is key and for the vast majority of SMEs, a plan will allow for flexibility and adaptation with a mix of deliberate and known actions, rather than actions that are simply a response to a changing situation.

The SME business community are the risk takers and the dream makers. You are critical in returning the economy to a new normal. For business leaders now is the time to adopt the mindset of a start up, commit, strategise and plan with velocity to thrive after lockdown. The Entrepreneur Club is here to help and if you’d like to take advantage of our complimentary Virtual Coronavirus Advisory Support sessions, speak to your St. James’s Place Partner.


The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

Covid-19: through investors’ eyes

Investors tell us how they’re still on the lookout for promising companies despite the coronavirus outbreak

Covid-19: through investors’ eyes

In the past couple of months, our world and working practices have changed drastically due to the Covid-19 pandemic. Workplaces have scrambled to adapt, and for the most part have done so successfully. But how has the pandemic affected tech investment? With a global recession on the horizon, there have been some worrying stories in the press about the ability of the UK’s tech start-ups to weather the storm. However, this gloomy outlook is not necessarily warranted.

A study carried out by Plexal, a workspace provider, and start-up database Beauhurst found that British start-ups had raised £663m1 since the coronavirus lockdown began in the UK. Looking at funding rounds between March 23 and April 27 2020, the study found that start-ups actually raised 34% more than in the same period last year (although the number of deals done was down).

But even with this positive news, entrepreneurs may be uncertain about the funding opportunities currently available.

Zooming in

Karen McCormick, Chief Investment Officer at transatlantic venture capital investor Beringea, says that the company quickly adapted its entire investment process so that it could be delivered digitally. First meetings are arranged on Zoom, ‘digital site visits’ have taken place, and the company has hosted investment committees remotely. These adaptations mean that Beringea has been able to manage its investment process safely and effectively, looking after the health of its own team as well as that of entrepreneurs.

“We had initial concerns about whether we would truly be able to build our conviction for an investment while not being able to meet the entrepreneurs in person or travel for on-site visits,” says Karen. “So far, however, we do not feel the lack of these traditional interactions has created problems.”

Alessandro Casartelli, Executive Director at GP Bullhound, a technology advisory and investment firm, says that as meeting physically is no longer an option, management teams are spending more time with investors on video, and meeting more team members. “Sometimes we organise sessions without an agenda that are a bit more casual; it really helps to build that rapport and chemistry that is essential for doing a deal.”

He also affirms that it’s very much been business as usual, with the company in the process of making several investments. “Certain businesses – for example those in videoconferencing, e-commerce or marketplaces, among others – have had a boost,” he says. “They’ve accelerated their growth and they’re in a position of strength.”

Still investing

Beringea’s investment has also not slowed down. The fund has co-led a US$29m investment in EDITED, a retail data and analytics platform that works with top-tier names such as Zara, Chloé and Boohoo, to improve their pricing and merchandising decisions. It also led a US$3.75m funding round for Luxury Promise, a resale marketplace that enables consumers to shop sustainably for pre-owned luxury goods. The firm has several more investments in the pipeline, including those that began after the start of lockdown. “Covid-19 has not changed our core investment strategy, but it has carved out interesting niches,” says Karen.

As we continue to rely on remote working and apps, online security and AI solutions will thrive. Karen says that Beringea is increasingly interested in the areas of FinTech, RegTech and cyber security – all sectors the firm focused on before the pandemic, but which it sees as of even greater interest and importance now. In addition, says Karen, people are more concerned about their health and wellbeing, so innovations in how we manage both remotely will be key growth areas.

“We see plenty of opportunities for entrepreneurs, whether they are selling to business or consumers. There are certainly still challenges ahead, but the businesses that can adapt to the new environment will survive and thrive,” she says. She does sound a note of caution, though, saying that companies should carefully consider their ideas and plans and whether they might thrive in the current climate – are they offering a particularly popular service? – or whether it might serve them better to put things on pause for a while during this uncertain time. “In terms of raising from Beringea, it is worth remembering that we are primarily concerned with backing talented entrepreneurs that can build successful teams. It is important that we understand the short-term impacts of Covid-19 on your company, but we are ultimately focused on your skills and expertise.”

Alessandro says that long-term thinking is more important than ever. “It’s really important when you speak with people that you’re very well prepared, not only to answer short-term questions but also on how you’re reacting to this new normal.”

Pitching’s new normal

As to the new norms of pitching, Karen’s main advice is to not be nervous about some of the distractions that can inadvertently pop up in meetings. “We are used to, and comfortable with, kids running across the background, screens freezing up for a minute, slow connections etc. Try not to let these things faze you – they certainly don’t faze us at this point!” She does, however, point to the importance of ensuring that if you choose to use a false background, it isn’t too distracting.

Alessandro says that when pitching, entrepreneurs should be aware that communicating emotion through video can be harder than in person. “It’s important that the presenter pays attention to the body language of those on the call to see if they’re interested, or if they should speed up or slow down. You should take pauses, make sure people ask questions and make it interactive.”

“One thing that probably needs to be different when pitching remotely rather than in person is you must have more than one team member who can answer important questions,” says Karen. “A gap in knowledge can be far more challenging – for example, you will not give a good impression if your finance director has a connection that is too poor to be useful or cuts out, leaving you with no one to cover their areas of expertise. Make sure that you are fully briefed on each other’s slides – it is more work, but it will spare your blushes,” she says.

 


The opinions expressed by third parties are their own and are not necessarily shared by St. James’s Place Wealth Management.Source

1. https://www.cnbc.com/2020/04/28/coronavirus-uk-start-ups-have-raised-825-million-during-lockdown.html

How to exit in 2020

Demonstrate strong leadership through the pandemic and achieve three months of stable, sustainable profitability and growth

How to exit in 2020

Business owners have been left in a state of uncertainty amid the Covid-19 crisis, and none more so than those looking to sell in 2020. But while the global pandemic has led to a pause in acquisitions, an exit this year could still be possible.

“Transactions are being put on hold, but it’s a postponement rather than a cancellation,” explains Andrew Lock, Co-Founder and Partner at LockDutton Corporate Finance. But after months of hold-ups on the completion of M&A transactions, the wheels of business are beginning to turn, and private equity houses are now saying they are once again open for business. Enquiries around new purchases are beginning to rise and buyers are ready to complete purchases that have been put on hold. “They have stated that for owners of businesses that have previously expressed a desire to partially sell or sell in future, then they remain keen to keep the dialogue going,” says Andrew.

There hasn’t been enough activity since economies around the world came to a standstill to know whether those looking to sell should be preparing for a slight downward adjustment in price. But what is certain is that owners of SMEs looking to sell have an opportunity now that they didn’t before, as Martin Brown, CEO of Elephants Child, explains. “The very fact that they’ve survived shows a lot about resilience and the nature of that business,” he says. “In the SME space, most business owners don’t have a plan, and those that didn’t have a plan during the pandemic are likely to have suffered more than others.”

Show leadership

And it’s at a time like this that leadership qualities can shine and impress potential buyers – or further impress existing ones. “It’s interesting to see whether entrepreneurs have been able to show their resilience by demonstrating that they are a good and competent leader,” says Martin. “A key strength of a good leader is forward-thinking: we understand we’re in crisis, we understand it’s been something like we’ve never seen before, but as a leader I’m still thinking ahead to that exit event and preparing as best I can for it.”

But how can you show proof of preparation for something as unprecedented as this pandemic? “It’s the old notion of controlling the controllables,” Martin says. “If you sit back and are overwhelmed, or are waiting for things to happen, you can blindly drift into a situation. Whereas if you start to think about the future and the things that you need for exit, you start to take control.”

In fact, there’s no time like the present for leaders to get their heads down and start working towards that exit. “If you wait for the pandemic to end – and who knows how long it’s going to go on – you’re just going to lose time,” explains Martin. “Having that business plan and the financial projections, the cash and balance sheets and profit and loss, in the form of an information memorandum is good work that should be done now.”

Return to growth

But a slow return to activity means an acquisition will still take time. The exact time period will vary between buyers or private equity houses, but there is one commonality. “The acquiring party will want to see a stable and sustainable level of profitability and growth for a period of at least three months,” says Andrew. “So, if it takes until September for the business to be back up and running at full pace, then by early December the acquirers will have three months’ active information and would look to conclude a transaction shortly afterward.”

And owners who have had to take advantage of government loans or furlough employees and are worrying about how this may come across, needn’t. “As long as their narrative is clear about how they would then expect to recover and move away from those initiatives, I don’t think that’s an issue at all.”

Buyers will, of course, need to know how the business has performed in previous years, and this will by necessity include figures over the period of the pandemic, but as important are the figures for the business’ recovery and what it will look like in the next three years. In the concluding words of Andrew: “There is no reason to believe that well managed businesses will not be successfully sold.”


The opinions expressed by third parties are their own and are not necessarily shared by St. James’s Place Wealth Management.

Get virtual advice for Covid-19

Take advantage of our Virtual Coronavirus Advisory Support sessions to help your business survive, stabilise and thrive

Get virtual advice for Covid-19

The Entrepreneur Club is working hard to support businesses through these challenging times and that includes our complimentary web-based advisory service that gives businesses the opportunity to get the guidance they urgently need from SME specialists.

These sessions are run by business growth advisors Elephants Child. CEO Martin Brown explains: “On any given day we could speak to three, 30 or even 60 companies, all of which are trying to furlough people or leverage government grants or, in short, survive. The notion of social distancing is very real, so we’re doing most of our work on Zoom or Teams or whatever medium entrepreneurs prefer. I’ve just talked to one company that wants to realise £3m in January 2021 and another that wants to ramp up operations and needs to put together a budget for that. These are organisations doing very progressive things in very challenging times.”

If you would like to book a virtual session with an adviser, you can do so through your St. James’s Place Partner. In the meantime, we’ve asked Martin to answer some key questions that could help companies struggling through the Covid-19 outbreak.

What are the most common challenges during the crisis?

Some businesses were decimated almost instantly, losing all or the vast majority of their business very quickly, so their challenge is very much about keeping the lights on and surviving this initial sharp, intense impact. There are others we talk to who are still not taking action; they are still taking it all in and considering things and wondering what they should do next, which I think is a particularly dangerous approach. And others are taking the opportunity to spend time working on the business, plan and find a way through.

I think a useful way of looking at it is as a three-stage process: first of all being able to survive, then stabilise the business and then thrive and grow the business going forward.

What advice are you giving businesses?

What is crucial in this situation is how you act as a leader. So, the message is, think about yourself first and then the business. Identify what help and support you need – whether that’s for your own wellbeing, your own health, or mental clarity. Then you can think about your business. Take a step back, think, then go and communicate your plans and how you want to move forward.

Of course, when we normally plan, we think about a three-year strategy and then an annual operating plan and then turning that operating plan into half years, quarters and daily activity. In a crisis situation like this you’ve already got to flip that plan to a 90-day horizon and become very granular, doing things hourly and daily. And you need to manage liquidity and cashflow and what you can do to preserve cash and bring more in to survive.

What support is available to businesses during the crisis?

Our offer in the first instance is about just being there for clients and potential clients so they’ve got somebody to lean on, who can bring them a bit of balance and perspective. That starts with a telephone call to understand what the business situation is and what they’re wrestling with. We also help them understand the raft of support measures the government has put together: job retention and deferment and various grants and business interruption loans they might be able to access.

How can businesses make the most of opportunities during the crisis?

Use this time to think about and address all of the things you can do to improve your business and make it relevant when we come through the other side. Start by supporting your clients, helping them and being generous with them. Even if that doesn’t lead to billable work, hopefully when the recovery comes, you’re top of mind. Communicate well and get brand messaging out to a wider audience. Have good positive conversations now, and if your business model is right then over time that’s going to stand you in good stead.

Are there any reputational risks for businesses to be aware of?

Businesses are trying to balance what’s right for people in terms of keeping them healthy and gainfully employed versus what’s right for the business, the brand and the brand values. It is these judgement calls that amongst other things require those strong and competent leadership traits; authentic, forward thinking and the ability to leave all key relationships and situations in a better place than when you started.

What learnings can business leaders take from the crisis?

The global effect is so significant that a lot of businesses in real trouble now couldn’t have done anything to protect themselves. But others that had a contingency plan in place have experienced an impact, but are trading through it as a result of planning they did two, three or five years ago.

Businesses that don’t have a plan or are early in that process are being hit particularly hard because everything is a challenge and a variable and they don’t have a clear path through it. Many are seeing themselves fall over in the area of technology, for example, because they haven’t invested in it over the past two to five years and now it’s really biting them. So, I think the message is about planning, working on the business and taking the time to do that rather than being swept along. There will be positive changes to businesses from this crisis.


The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

Protecting your wealth

How can entrepreneurs secure their personal wealth in the era of coronavirus?

Protecting your wealth

The coronavirus crisis is putting many businesses under pressure and placing a huge strain on entrepreneurs’ finances. For the majority of business owners, personal wealth is closely linked with business wealth, which means the threat to their money and future lifestyles is amplified.

It’s not uncommon for the lines between personal and business wealth to become blurred. Technical Connection consultant Simon Martin says: “An entrepreneur is extremely reliant upon his or her business. It provides for their present and future – their lifestyle is dependent on how their business is doing – so naturally it’s going to be quite important to get it right. As business owning entrepreneurs, often they are not very well diversified, so considering diversification as a removal of risk is important.”

Thinking about risk

In light of the pandemic, there is a lot to consider, and knowing what to do in such an unfamiliar situation can be daunting. Simon explains: “For a financial planner, risk is the key thing to consider and mitigate. Thinking about how to protect your business – because your business is the driver of your wealth.

“So, think about what actions you may need to take. It might be protection in terms of life insurance. It might be an element of diversification within your business; maybe look at new markets or new opportunities. Creating a really detailed financial plan that incorporates both business and personal assets is important. And also engaging with specialists to look at your business and make sure it’s as efficient and effective as it can be. The key action is - create a plan.”

Martin Brown of business growth advisers Elephants Child adds: “First you’ve got to survive and stabilise your business, but then you want to push on and thrive. Now is a really good time to think about what your agenda looks like. Although we are in the midst of a crisis, there will be a way through it, the market will recover and we will recover, and everyone needs to be best placed to take advantage of that.”

Look after yourself

For you to effectively manage your personal wealth at the moment, he suggests that it’s important to start by looking after yourself: “Don’t be afraid to feel vulnerable or to lean on people. Don’t panic or bury your head in the sand. Do something positive and do something logical. If that means you need a bit of help, then so be it. It will pay dividends in the long run.”

To prepare for when we come out of the crisis, he suggests forward thinking and strategic planning: “Think about what you want in retirement, when you are going to retire, what you need and what you want to leave to others. From that standpoint, you can see what your pension looks like, what the gaps are, and what protection or tax-efficient wrappers you need to get in place.

“You then need to know what the business needs to do for you. If you think about it as enabling your future, you can review remuneration packages, consider key person shareholder protection and whether you are fully funding your pension. All those things often get lost because we’re just thinking about satisfying our next client, paying our next supplier and managing our teams. But these are things that you can do now, even in a time of crisis.”

The St. James’s Place Entrepreneur Club is uniquely placed to help you navigate the Covid-19 crisis. We can provide the business advice you need from people with many years of experience of running businesses themselves. And through your St. James’s Place Partner you can also access financial expertise so that you can develop a seamless and robust plan that spans your business and personal finances.


The opinions expressed by third parties are their own and are not necessarily shared by St. James’s Place Wealth Management.

Cash in a time of crisis

As the Covid-19 crisis engulfs the country, entrepreneurs are forced to consider the impact it will have on their balance sheets, and implement strategies that will help their businesses emerge from lockdown safe and well

Cash in a time of crisis

April 2020 saw wave after wave of sobering news reports, from the Prime Minister’s health to the lack of PPE for frontline workers to the cancellation of the last few sporting events left on our summer calendar. But for business owners, one in particular is likely to cause sleepless nights. At the beginning of the month, the British Chambers of Commerce released its first Covid-19 Business Impact Tracker, in which it revealed that 44 per cent of UK businesses have less than three months’ worth of cash in reserve1.

With the economy predicted to be hit hard by the pandemic – a March 2020 report by KPMG sets out a downside scenario in which UK GDP contracts by 5.4 per cent in 20202 – what, if anything, can businesses do to survive? And how can entrepreneurs mitigate the impact this black swan event will have on not only their business but their own mental health as the stress of shrinking cash reserves plays on their minds?

Pivot and pare down

Julie Devonshire, Director of the Entrepreneurship Institute at Kings College London, believes that many entrepreneurs have the skills and mindset to emerge from the crisis stronger.

“We’ve already seen so much entrepreneurial behaviour,” she says. “People using their skills to solve problems, learning to innovate, working in diverse teams to increase the supply of essential items like face masks, scrubs and ventilators. You only have to walk down your local high street to see businesses working on their Revenue 2.0 models, pivoting to keep things ticking over. The catering trade, with the widespread move to takeaway and online delivery, is a classic example.”

Even if repurposing your business to sell fresh produce online or manufacture PPE isn’t possible, there’s still a great deal entrepreneurs can do to weather this storm, says leading entrepreneur, investor and technologist David Walsh, who is now Entrepreneur in Residence at the Institute.

“We’ve experienced downturns as severe as this before, and if you can get through it you will be a stronger business,” he says. “For most small businesses, a little money goes a long way, and it’s possible to make progress, albeit modestly. You’ve got to cut costs and look for ways of bringing revenue in. You’ve got to communicate clearly, accurately and respectfully with your clients, suppliers and banks to find a way to work together.”

Once a business has assessed its eligibility for government funding and put in place a cash flow plan and a vision for its return to normality, Julie says, there is an opportunity to look at what you can do in the meantime.

“Can you do other things with your brand and your business?” she asks. “For example, smarten up your premises, work on your brand, accelerate your digitisation, build in e-commerce or grow your online community?”

Julie cites the example of the author and influencer Joe Wicks, who has used the crisis to send his already strong brand supernova by offering free physical training sessions on YouTube, aimed at families in lockdown.

“His brand has just exploded. He’s done an amazing, entrepreneurial thing to support others and his business will be far better after this crisis,” she says. “If you can’t do anything about revenue now, you can still build your business for the future. Many businesses forget how much you can do with very little and how much you can achieve by being lean and agile. You don’t need £30,000 to build a website, develop an online community and amass a social media following. And we all have time for that now.”

Don’t worry, be happy

Of concern to many entrepreneurs is the drying-up of investment funding following the crisis. In early April, the tech community launched the Save our Start-ups campaign3 – which resulted in a £1.25bn equity-based liquidity package from the government to rescue at-risk start-ups4 – and businesses in other sectors looking for investment face tough decisions too.

“Investors are not necessarily looking for new investments, but they are keen to keep those they’ve already funded running,” David says. “But there are still funds out there looking, and amazing opportunities in sectors that are not impacted by the crisis. It’s important at times like this that investors show leadership, act positively and stick together.”

Even if cash-flow worries are mounting up, Julie emphasises the importance of maintaining perspective.

“Resilience is vital for entrepreneurs,” she says. “This is an opportunity to understand where your levels of resilience lie and try to improve them. People keep returning to this being about more than business: people’s health, families and happiness are most important, and that helps them to focus on practical things they can do to help get through this. And we will – a vaccine will come, lockdown will end. One way or another, this is temporary.”

David emphasises the importance of ethical behaviour by businesses during times of crisis. “I have seen poor behaviour from some landlords and banks. But when we come out of this, there will be those who can hold their heads high and say they did the right thing. The real test is what we do to help one another, and how we can emerge from this leaner, fitter and more resilient so we can look back and say we had a good Covid crisis.”


1. https://www.britishchambers.org.uk/news/2020/04/bcc-coronavirus-business-impact-tracker

2. https://home.kpmg/uk/en/home/media/press-releases/2020/03/covid-19-brings-uk-economy-to-temporary-standstill-but-upturn-expected-in-2021.html

3. https://saveourstartups.co.uk/

4. https://www.bbc.co.uk/news/business-52348409

The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

Bouncing back fast

Now is the time to plan for recovery.

Bouncing back fast

Businesses, communities and individuals have already been impacted dramatically as a result of the global Covid-19 pandemic. Now that most businesses have put their continuity plans in place or closed down completely, it is time to look to the future and plan for recovery.

We are still in the middle of the crisis, and most businesses are somewhere between reacting to the situation as it unfolds and adapting their working practices so they can still deliver for customers clients and do the right thing by their people.

When a crisis hits, good companies do three things fast;

  • Their leaders step forward and are visible,
  • They make decisions quickly to protect their people and get continuity plans in place; and
  • They communicate clearly and regularly.

But this is the basics.

Surviving through this is only part of the challenge. We now need to start to plan for growth and recovery.

 

The “New” Normal

There will be a few organisations that will click back to old processes and ways of working when this is all over. They will thrive on having some normality back and will put the interim changes they needed to make to survive and continue behind them. They will thank people for the things they did to help the business continue, and they will move on.

High-performing businesses will think differently. They will do three critical things which will enable them to bounce back faster and stronger than before.

 

Grow and Inspire

Successful businesses will look for ways to learn and adapt from the experience and will use it as a catalyst for growth and evolution.  They won’t just revert to the old ways of working but will look at what they can learn from the changes they made. They will evaluate what worked, what didn’t and most importantly will decide which new practices they keep and could apply more broadly. I am sure if you told the NHS they could get a new supplier of ventilators through their rigorous procurement and testing processes in a matter of days and weeks before Covid-19, they would have said it was highly unlikely, if not impossible. Now they know it’s possible you would hope their Covid-19 procurement process becomes the norm.

In crisis mode people are able to think outside the box. You need to become creative problem solvers to be able to react to the changing situation. Work out where you can apply this new way of thinking elsewhere in the business to drive change and better performance.
Create symbols of change which demonstrate the positive things that can emerge from this period. Find things big and small that you are doing differently and tell the world… well, the people in your business at the very least. This links directly to recognition. Following a crisis there are always tales that bring to life the spirit of your business. Find them, celebrate them proudly and use them to inspire others.

 

Engage and Thrive

Now is the time to invest for growth.

This crisis will impact your strategy and the way your brand is perceived for the foreseeable future. You might need to change your approach, or you may not have the funds for investment that you thought you would, or you could have had to completely pivot your business to survive.  

Take the time to review your strategy, identify whether it is still fit for purpose. If it is not, work with your people to set a new path. Paint a clear vision for the future and build the journey you will go on to achieve your goals together. When you have defined your strategy, review your learning and development strategy to ensure that it will build the skills you need to make you future fit.

A crisis is an opportunity to see the true DNA of your business. Make sure they are the same characteristics that will enable your growth and prosperity and invest in making sure your culture is evident at every stage of your employee journey.  Bacardi have spent years focused on their culture, making sure their employee experience reflects their DNA Fearless, Founders and Family are not just words but direct how they work as colleagues and how they do business. In a crisis you see this come to the fore spontaneously, whether that’s changing production lines to make hand sanitizer or launching a new product to raise money for charity. This happens because their people are empowered to truly bring the Bacardi spirit to life in the best and worst of times. 

The right culture will drive customer loyalty and growth, so take this moment of reflection to think about your culture.  Does it need to be redefined to enable you to achieve your goals?

 

Involve and challenge

When your strategy and vision is defined, your people are clear on their role in helping you succeed and your culture is hard-wired into every step of your employee journey, it will be easier to find opportunities for continuous improvement. 

Listen to your people to find out what is getting in their way and create the forum and mechanism for them to solve the problems. Remind people what your purpose is to help you drive productivity, effectiveness and problem solving. Create moments and platforms for innovation for your entire team, not solely the innovation function. Work out loud to enable others to collaborate, connect and contribute so that you can leverage your entire talent pool, particulary in moments of crisis.   

Navigating a business through such difficult times is not something most leaders will have experienced.  This is new territory. Looking for the opportunities to reinforce who you are and what you stand for will be critical. The challenge is not to be underestimated especially when many businesses will also need to rebuild trust and re-engage people who they have furloughed during this period.  Unleashing, empowering and inspiring your talent though this experience will be key.  This is not something we can cost cut our way out of.

 

We need to think differently. We need to be ambitious. We need to put the human back into business.


The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

This article has been provided courtesy of United Culture.

Key tools for remote working

The software that can keep your remote team working seamlessly together

Key tools for remote working

The Covid-19 crisis means that the vast majority of companies have had to move to home working. For some employees, this will be the first time they have worked from home; for many companies, this will be the first time their entire workforce has had to work remotely at the same time. 

Prithwiraj Choudhury, Lumry Family Associate Professor of Business Administration at Harvard University, says that companies should avoid letting employees feel distanced or alone, which can happen easily without the typical day to day casual meetings and conversations easily engendered in an office setting. “Check in on workers and team members’ psychological wellbeing,” he says. “Try to socialise online – set up virtual watercoolers”.

He notes the importance of ensuring these activities are optional (so that workers don’t feel under extra pressure) and also that there are several scheduled social activities, so that people are able to attend while still fulfilling their other obligations outside of the workplace.

Jean-Nicolas Reyt of the Desautels Faculty of Management at McGill University agrees, saying: “A lot of the ‘teaminess’ in teams comes from informal interaction with peers. Research shows that teleworkers who are not involved in these informal interactions tend to feel isolated. It is essential for teams to use online tools to recreate these types of interaction. A meeting on Zoom in the morning is a good way to check in with everyone.”

As to what companies should bear in mind when choosing the platform(s) on which to work remotely, Prithwiraj says: “More than the tools, it’s the habit. It’s human routines that are hard to change”. He advises being patient with employees in this unusual time. And Jean-Nicolas notes that managers need to focus more on ‘why’ the work is done and let their subordinates figure out the ‘how’.”

With this advice in mind, we run through several software options below to help you pick out the best for your team.

Skype

Now a household name, Skype has been around since 2003. A telecoms application, Skype allows users to make video chat and voice calls across a range of devices, from desktop computer to mobile. It also provides instant messaging services, but its primary use is for enabling voice or video communication.

Skype’s Meet Now option allows you to invite Skype contacts and those without a Skype account to a collaboration space, either via the app or through web browser. Call recordings are stored for up to 30 days.

Zoom

Founded in 2011, Zoom offers remote video conferencing services. Easy to use, and available through an app or web browser, since the lockdown usage has exploded. There is no need to create a Zoom account, and it is free to use. However, paying customers get perks such as unlimited meeting times and can use the software’s Zoom Room offering. This allows companies to schedule and launch Zoom meetings from conference rooms; up to 500 participants can join.

Of course, a key concern with Zoom is its security flaws, with reports of ‘zoombombing’ (when hijackers take over a call) and with the revelation that it was easy to find thousands of user videos online. While some municipalities, schools and organisations have chosen to ban the use of Zoom, others have embraced the software. Zoom continues to work on patching up its security flaws.

Teams

If your business already has an Office365 subscription, Microsoft Teams is an easy choice to make as it integrates with Office. Teams can also be customised so that it easily works with other existing software your company uses, such as Creative Cloud, Trello and Google Analytics.

Teams allows direct text chat between participants, which can easily be turned into a one-on-one or conference call. Within a team, different channels can be set up for different conversations. Files can be uploaded to the app.

Trello

Launched in 2011, this Kanban-style software allows users to create task boards and track projects across them. Deceptively simple, Trello can be used to map the most complex tasks and assign roles. By creating ‘cards’, users can add comments, upload files and create checklists. Everyone invited to a board gets notifications as to actions taken, so nobody misses out. Trello offers various add-ons; some are subscriber-only, but others are free.

Slack

This business communication platform brings a company’s communications together into one space. All content on the platform can be easily searched, from conversations to copy contained within files and presentations. Users communicate via text and can speak through public or private channels. Files can easily be dragged and dropped into Slack and shared with colleagues; they can then comment on these instantly. Slack can be used via app or web browser, and is built to integrate with other tools a company may be using. 

Basecamp

This project management tool allows users to divide up their work either via project or team. Message boards mean users can easily track a project’s process and send messages either to all in a group, or to sub-groups. To-do lists and schedules can be set up, and all are accessed via the same easy-to-navigate page. For more informal chats, there is Campfire. Basecamp encourages users to use this chat interface for quicker comments and chats. Basecamp can also be synced with email, so that users can get notifications when messages are sent in the software.

Whatsapp

Although primarily seen as a personal app, used for chatting with friends and making calls, Whatsapp also has a desktop version, Whatsapp Web. The software (both app and desktop) features end-to-end encryption, meaning that file-sharing and conversations are secure. Users can send files and voice notes to one another via text and can make video and audio calls. Chat group size can be anywhere from two to 256. 

Lockdown is a chance to get to grips with some of the most exciting software tools on the market – and they could see your business through to more normal times.


The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

COVID 19 – Business Owners’ Advisory Service

In this time of crisis, the immediate focus is how to survive... and then, how to thrive

COVID 19 – Business Owners’ Advisory Service

There’s no getting away from the fact that recent events have changed the way we live and do business. As a business owner you will be feeling a range of emotions, with your livelihood and those of many others seemingly on the line. In this time of crisis, the immediate focus is how to survive. And then, how to thrive.

This guide provides vital strategies and tactics you can implement right now and in the medium term, to ensure your business does both – survive and thrive. It’s important to create some space between the stimulus and the response. So, take ten minutes to understand the shift you have to make from what you knew, to the current environment - which is covered in the opening section of this guide. Once you’ve flipped your focus, the guide provides a useful timeline, outlining what you need to do, and when, backed up by our support to help you navigate the uncertain waters ahead. You’ve probably done some of this already, but please be reassured that there are plenty of resources available to you.

 

Create the space

In normal times, our advisory support for you is spread across a number of fundamental operating activities, primarily encompassing:

• Strategic intent or long-term view on the direction of travel
• Three-year plan
• Annual operating plan
• Half-yearly focus
• Quarterly tracking
• Monthly performance to promises, compliance and governance
• Daily action

However, these aren’t normal times, so we need to flip this and focus all of our attention on four specific key areas only, namely:

• Daily actions and outcomes
• Weekly reflection, refinement and we go again
• Monthly performance to promises, compliance and governance
• Quarterly – 90 day rolling plan

 

Timeline

In an ideal world, you would have already completed these daily actions in Week 1 of crisis management:

Day 1: You. And assess if your business is at immediate risk.
Day 2: Support
Day 3: Cash and costs
Day 4: Risk Register
Day 5: Outcomes

DAY 1: YOU

Define what support you need both business and personal. What is your work mode for the coming weeks and months? Start with you. Take care of you and yours.

Who do you need to help and support? Think about the key relationships in your business and how you can support them, what do you want them to think and how do you want them to behave in these times of crisis:

  • You – can you reduce your cost burden on the business
  • Clients
  • Suppliers
  • Your Team
  • Investors
  • Stakeholders

Create a communications plan that includes providing employees and other stakeholders with regular situation updates as well as actions taken.

Is your business at immediate risk? We can offer you access to practical and pragmatic advice so that you satisfy your duty of care and powers under Companies Act 2006 and connect you with insolvency practitioners, if appropriate.

Make some assumptions. This pandemic will have a material impact and change certain practices and thinking forever. Global experts will find a cure. We will get through this. We have recovered from other market shocks.

Set some context. This is unparalleled, we are all in this together, now is a great time to lead and work on the business.

Your team: Ensure staff can work from home and have the necessary systems and access at their disposal to do so. Create a ‘work from home’ policy and share it with the workforce.

 

DAY 2: SUPPORT

Access the support that is around you, start with the Government

Work through these support mechanisms and leverage those that are appropriate for you. This will change by the day. A package of measures to support businesses including:


a Coronavirus Job Retention Scheme
• deferring VAT and Income Tax payments
• a Statutory Sick Pay relief package for SMEs
• a 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England
• small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
• grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
• the Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
• a new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans

• the HMRC Time To Pay Scheme

 

DAY 3: CASH & COSTS

Cash is king, maintaining liquidity is key.

• Collect your cash and manage debtors closely
• Can you extend or defer payment to creditors
• See 2 above for Time to Pay, Deferment, Grant and loan options
• Assess each line of your profit and loss account; can you enjoy payment holidays, reduce or enjoy rebates on say; rent, communication and utility costs.
• Appeal to your time in line with employment law and empathy as to volunteers for reduced working hours and salaries.
• Work out weekly expenditure and make a contingency plan.
• Contact existing debt providers for support.
• Explore financial instruments e.g. discounting, factoring, supply chain loans and term loans.

We can provide access to specialists partners in costmanagement, financial experts who can model cashflow and recommend actions and funders who can provide advice.

 

DAY 4: RISK REGISTER (90-DAY ROLLING PLAN)

A Risk Register approach is a great way to stress-test your current plan or frame the needs for the contents of a plan if you do not have one? Your plan will need to flex as the pandemic impact unfolds.

  • List the risks, suggested headings could include but are not limited to; You, Team, Clients, Sales, Cash, Cost, Insurance, Proposition, Technology, Data, Funding and Markets.
  • Think about the potential outcome of each risk.
  • Define the likely impact, the likely probability and score each out of 5, multiply Impact * Probability to give a score or priority.
  • List what action you can take to mitigate the risk.
  • Define who is taking the action and when.

From this, produce a 90-day rolling plan - A contingency plan e.g. building closure plan, contract clarification, deep cleanprovider, deep clean methodology and sick pay policy.

 

DAY 5: INSURANCE

Review your policy and check with your insurance broker if you need confirmation of the type of insurance you have purchased.

It is highly unlikely that the vast majority of businesses will have any cover for losses following COVID-19. Businesses who have cover for Trade Credit Insurance will have cover for their customers who owe money for products or services and do not pay their debts or pay them later than the payment terms dictate. This could result from businesses not being able to pay for goods and services delivered as the result of Coronavirus.


Be sensible, practical and, above all, calm when managing risk and engage an expert who can help you with this.

 

WEEK 2: 

Reflect on the outcomes from week 1. Re-assess your ability to survive and structure your approach to Day 6 and each day thereafter.

• Have you improved or fully address the actions from week 1; you, support, cash and costs, plan and insurance.
• Which actions do you need to carry forward?
• Think about and deliver great Leadership (see below)
• Review the previous days outcomes and actions.
• Review the previous days COVID 19 advice and support.
• Action carried forward from week 1 e.g. COST or a new action.


Leadership

The five attributes of effective leadership in Volatile Uncertain Complex Ambiguous (VUCA) times are thus:

1. Visibility
2. Sensible, considered and pragmatic responses
3. Positivity and frequency in communications
4. Authenticity and integrity
5. Care and empathy

Being mindful of these in all your business dealings both with colleagues and employees, and with external contacts and suppliers, will ensure that you maintain a sense of calm and measured leadership throughout the duration of this crisis.

 

Next steps: Join our Covid-19 - Business Owners' Advisory Service

To help and support you through these challenging times, we have set up a complimentary web-based advisory service with a specialist SME business adviser. These sessions are designed to be led by you, exclusively focusing on your specific issues, needs and support requirements. As well as providing access to specialists, we can cover some or all of the following topics:

1. Manage client relationships
2. Improve cash and liquidity
3. Reduce costs
4. Understand and leverage insurance
5. Winning new business in a crisis
6. Using technology
7. Access to finance
8. Operational resilience, ‘keeping the lights on’
9. Communicating effectively in crisis
10. Lead and inspire – executive coaching

Talk to your St. James’s Place Partner to book an hour-long session with our virtual consultancy service, which can help you manage the challenges of Covid-19.

 


Covid-19: get the help you need

We'll guide you to the support available to see your business safely through the pandemic

Covid-19: get the help you need

The pandemic has been sudden and extremely challenging with many businesses forced to close as part of a national strategy to slow the virus and protect the vulnerable. With economic activity suspended in many sectors, a huge effort has been made to support companies until Covid-19 is brought under control. Here are just some of the tools to help you shelter your business.

1. Coronavirus Business Interruption Loan Scheme

Your bank may be able to help if your business gets into difficulty because of Covid-19. The Government and Bank of England have made billions of pounds available to support small and medium-sized enterprises through the Coronavirus Business Interruption Loan Scheme. It will provide lenders with an 80% guarantee on each loan. The scheme will support loans up to £5 million and your business is eligible if it has a turnover of no more than £45 million. The full rules of the scheme and list of accredited lenders is available on the British Business Bank website.

2. Job retention scheme

The Chancellor has announced a coronavirus job retention scheme, allowing any employer to apply to HMRC to have up to 80% of a member of staff’s salary paid – capped at £2,500 a month. This will be backdated to 1 March and run for three months (a timescale that will be kept under review). All UK businesses are eligible for the scheme but you will need to designate affected employees as ‘furloughed workers’ and provide information about them and their earnings through an online portal. At the time of writing HMRC was working urgently to set up a system for reimbursement.

3. Time to Pay

If you think you may be eligible for support from HMRC through Time to Pay, which allows you to pay tax over a longer period, you can call the helpline number on 0800 024 1222. Arrangements are agreed on a case-by-case basis and can be tailored to your circumstances and liabilities. In a further bid to help, HMRC has also deferred VAT for the next quarter and you won’t need to make any VAT payments during this period. You have until the end of the 2020/2021 tax year to pay any liabilities that have accumulated over the period.

4. Statutory sick pay and Employment Allowance

Small and medium-sized businesses (employing fewer than 250 people on 28 February 2020) can reclaim statutory sick pay (SSP) for absence due to Covid-19. It covers up to two weeks of SSP per eligible employee. You need to maintain a record of staff absences and SSP payments but employees do not need to provide a GP fit note. If you require evidence employees can get an isolation note from NHS 111 online. In addition, small employers with a National Insurance bill of £100,000 or less will continue to qualify for Employment Allowance, which will be expanded to £4,000 per business from this month.

5. Business rates holidays

A business rates holiday for retail, hospitality and leisure businesses in England has been introduced for the 2020/21 tax year. And if you received the retail discount in the 2019/20 tax year you will be re-billed for this period. Eligible properties include shops, cafes, restaurants, drinking establishments, cinemas, live music venues and those used for assembly and leisure, hotels, guest and boarding premises and self-catering accommodation. This will apply to your April council tax bill and you don’t need to take any action. In addition, Small Business Grant Scheme funding of £10,000 is available to some businesses – your local authority will contact you if you are eligible. The governments of Scotland, Wales and Northern Ireland have launched similar help.

6. Insurance cover

Think about how your business insurance will work if your business has to close due to an outbreak of the virus. Check the wording because standard policies may not include any protection if your business suffers because of disease. Talk to your broker to see if you have business interruption cover in your commercial insurance policy. Once you have confirmed that you have business interruption cover, check if you have an extension for ‘notifiable diseases’. If you have this policy wording, you should contact your broker/insurer to see if coronavirus is covered. Most businesses do not have insurance that covers a pandemic, however, and in this case, you should consider the Government support on offer.

7. Self-employed Income Support Scheme

If you are self-employed or a member of a partnership, you can claim a taxable grant worth 80% of your trading profits, up to a maximum of £2,500 a month, for the next three months and this timescale may be extended. You should check the Government's advice on the Self-employed Income Support Scheme to make sure you are eligible. Among the requirements, you must have submitted a self-assessment tax return for 2018-19 and your self-employed trading profits must be less than £50,000, while more than half of your income must come from self-employment.

At the time of writingit was not possible to apply for this scheme. HMRC will contact you if you are eligible and invite you to apply online. You may be entitled to 80% of trading profits from the three tax years between 2016 and 2019.

8. Government advice

The Department for Business, Energy and Industrial Strategy has launched a dedicated business support helpline, where small business owners in England can get advice on how to minimise the impact of coronavirus. The number is 0300 456 3565 but you can also email enquiries@businesssupporthelpline.org. The Scottish Government’s helpline number is 0300 303 0660; the number for Wales is 0300 060 3000 and in Northern Ireland it is 0800 181 4422.

The Entrepreneur Club is here to help. You can read our guide or talk to your St. James’s Place Partner to book an hour-long session with our virtual consultancy service, which can help you manage the challenges of Covid-19.


Links from this article exist for information only and we accept no responsibility or liability for the information contained on any such sites. The existence of a link to another website does not imply or express endorsement of its provider, products or services by us or St. James’s Place. Please note that clicking a link will open the external website in a new window or tab.

Exit during a pandemic

There are still some buyers out there but most owners will have to navigate the Covid-19 crisis before considering a sale

Exit during a pandemic

Exit plans will have been thrown into disarray for many entrepreneurs by the sudden and devastating impact of Covid-19. Many now face a period of uncertainty just at the moment they had hoped to sell up and reap the rewards of years of hard work.

Corporate finance company Entrepreneurs Hub says that while some buyers remain upbeat and committed to purchases that have already been negotiated, it is impossible to say whether they will finally sign on the dotted line if the crisis continues for some months.

Entrepreneurs Hub Director Andrew Shepperd says: “Strong acquirers are still looking and these broadly fall into two categories: opportunists looking to pick up businesses on the cheap, mimicking activity after the 2008 financial crash; and strong companies taking advantage of the lack of competition to buy very special businesses or those that will help them power through this crisis."

Changing landscape

And the mergers and acquisitions landscape has shifted significantly, with new ‘hot’ sectors emerging that are related to the pandemic. These include pharmaceuticals, healthcare, healthcare supplies, online ordering, home delivery and distribution, cloud and online businesses, video streaming and electronic gaming.

Malcolm Murray, also a Director at Entrepreneurs Hub, says: “Obviously you are going to have certain types of businesses that are going to do quite well through this period. These are people supplying the UK in sectors such as medical equipment, manufacturing, distribution and supply. But if we look at the high proportion of business owners, they have been significantly impacted over the past two or three weeks.

“If you were planning to exit it is time for damage limitation and what you can do to make sure the business stays as profitable as possible. It is going to slow the market down for a period in certain sectors but we still have buyers saying: We are committed to this. We know it’s a freak period and we are still committed. Of course, what I can’t say, if I’m being honest, is what timeline they will complete the deal in."

Start contingency planning

So, the advice for those about to exit is the same for all entrepreneurs at this critical moment: don’t panic and understand the situation your business is in. You need to really understand your business and how long your cash will last. Then you can make a contingency plan, whether that means accessing government loans or furloughing staff.

Malcolm adds: “There is a mix of emotions at the moment. Some business owners are afraid. Others are saying they just have to make some hard decisions, and I think that’s the key. Doing nothing is not an option. This isn’t just something that might go on for a couple of weeks. It could go on for two or three months, so you’ve got to take action to protect your cash. We are encouraging business owners to look at their cash flow for the next three to six months and what they might need to do with staff who can’t work.

“We are in unprecedented times – your turnover and profits may take a short-term hit,” he adds. “Stay in contact and maintain your relationships with your customers so you understand their situation and they know you are there for them and will return when the country returns to some normality. Don’t focus on the situation, focus on taking actions to implement a plan to ensure you control costs, maintain cash and longer-term profits.”

Malcolm says that many owners he has spoken to regret not selling sooner and more may consider an exit once the pandemic is past in order to bank any further risk. And for many, the clear lesson that has emerged is the need to maintain higher cash reserves to ensure their companies are as resilient as possible and can weather any storm.

The Entrepreneur Club is here to help. You can read our guide or talk to your St. James’s Place Partner to book an hour-long session with our virtual consultancy service, which can help you manage the challenges of Covid-19.


Exit strategies may include the referral to a service that is separate and distinct to those offered by St. James’s Place.

The opinions expressed by third parties are their own and are not necessarily shared by St. James’s Place Wealth Management.

Making the most of alternative finance

The rise of alternative finance shows there’s more than one way to get the growth funds you need

Making the most of alternative finance

Entrepreneurs have benefited from significant growth in alternative finance over the past five years. According to the British Business Bank’s Small Business Finance Markets 2019/20 report, between 2014 and 2018 the value of smaller business asset finance deals has risen 32% to £19.4bn, while the amount of equity finance increased by 131% to £6.7bn. In the meantime, however, traditional bank lending has remained flat.

Part of this is legacy from the financial crash of 2008 when bank lending evaporated. But Mark Brownridge, Director General of the Enterprise Investment Scheme Association which supports UK investors and small businesses, says that companies are also more aware of the range of finance options available.

Finance for agile growth

Mark says: “It isn’t always appropriate for early-stage companies to borrow as they may not have revenue and can’t pay off the interest and the capital."

He believes British businesses are following a trend established in the US where equity finance is much more mainstream, and where young enterprises are more open to giving a stake in the company in return for cash. “SME businesses are far more aware of equity funding as an option, and I think that will only increase in the future. A lot of businesses look across to the US and see the trend towards taking a lot of Venture Capital (VC) money, going big and quick with the fail fast kind of attitude – you can’t do that through bank lending.”

“Finance generally comes through a VC or fluid equity lending, and that kind of model is becoming more established in the UK where companies don’t just want to grow steadily based on revenue, they want to get a lot of investment and go quickly. You look at companies like Monzo and Revolut, and they’re taking a lot of equity funding and trying to get lots of customers and are not necessarily worried about revenue or profit."

The money raised from equity funds a range of things, often it is for cash flow and keeping the company running and paying wages, but it also finances new product development or entering new markets and taking the business to the next level.

Asset finance requires an asset to be loaned against and so generally favours manufacturing, engineering or transport-based industries. As a result, it tends to be used to invest in new assets such as machinery or fleet. Because there is security in the assets being refinanced or financed, there is plenty of flexibility with asset finance products, including seasonal payment structures.

You can find out more about how your business can benefit from alternative finance by speaking to a St. James's Place Partner.

What investors want

Investors, from VCs to angel investors, are looking at a broad range of sectors. However, Mark points to fintech, artificial intelligence, data analytics and public security as particularly popular areas at the moment. He says: “Different investors want to invest in different stages; some want to get right in at the first stage and be loose with the first wave of money and continue on that journey with the company and hopefully realise significant growth. Others don’t want to take early-stage development risk and want to come in later once the company has revenue and heading for profit."

Chris Barrett is an angel investor with a long and varied career spanning electronics, media, software development, and consultancy in the City of London. "Because of my background, I'm interested in media and financial ecosystems but also medical technology because of the fascinating crossover in different disciplines.”

Preferring to make his own investment decisions, Chris is not aligned to a syndicate, accessing deals both on crowd platforms and directly. He says: "It is unusual to see profit in the first few years, so patience is required."

While Chris is quick to filter out business ideas that don’t appeal or interest him, the people behind the concept are critical. “The entrepreneurs I work with are smart, and they need to have credibility. I look at the founders and figure out if they have the right stuff to follow their vision. They need to be agile and able to recognise if they’re going down the wrong route and pivot to the right opportunity."

While alternative finance can be more challenging to navigate than traditional bank lending, alternative finance providers understand the needs of SMEs and have specialist knowledge in a variety of sectors to support the business and their investment.


Please note that some of these methods for raising finance are unlikely to be the first options as there will be conditions attached to any agreement reached, which by their nature will be more onerous than those imposed by a mainstream lender.

The opinions expressed by third parties are their own and are not necessarily shared by St. James’s Place Wealth Management.

Start-up loans - the ‘bots’ have arrived

Loan providers are automating more processes. Entrepreneurs have an opportunity to get ahead of the game

Start-up loans - the ‘bots’ have arrived

Vast amounts of data are now available on start-up businesses and their founders. Funders are tapping into these new data sets using advanced technologies to find and assess high-potential businesses. The rules of start-up funding are being re-written and savvy entrepreneurs will want to understand how they can win the bots over.

Loans now reaching start-ups

Traditionally, loan finance has not been available to start-ups. Lenders still typically want to see a trading history of around two years, often longer, before even considering a loan. But this is changing.

One lender targeting start-ups is Just Cash Flow plc, which uses a process they have called ‘augmented intelligence’. According to CEO John Davies, this takes advantage of machines’ ability to process large amounts of data very quickly, and couples it with experienced human insight.

Finding high-potential companies is mostly automated. Just Cashflow’s technology screens new companies registering with Companies House – around 16,000 per week1 – and identifies those which have a high potential to be successful.

John says this focusses mostly on the founders, not so much the characteristics of the business itself: “It is people and their actions who are mostly responsible for a business succeeding, and technology allows us to identify the ‘DNA’ of someone who is likely to be successful. The business might be a start-up, but the people are not necessarily starting-up. And particularly in the first few years of a business, it’s all about the people. Good people will learn and adapt to make that business a success.”

John does however stress that rolling out loans to start-ups is not a replacement for equity finance. His company targets businesses that will be able to generate revenues and profits very quickly and will be able to service loan repayments. Businesses where revenues and profits are still some way into the future would not qualify and are more suited to equity funding.

New data sets

Just Cashflow’s algorithm looks at a range of information to identify target companies. For example, it looks for founders who have appropriate experience (sector-specific, managerial and entrepreneurial experience) by searching sites such as LinkedIn. Their behaviour is considered, such as how quickly they get their website indexed, how well they have built a professional social media presence (perhaps a widely-followed blog, Facebook or Instagram account), and when they register for VAT. John says: “These are just some of the actions which are typical of people who are setting out their stall to create a successful business.”

Of course this can work both ways. According to John: “We tell our children to be careful on social media because some posts might look bad in a future job interview. The same thing applies to entrepreneurs who might be talking about their own business, clients or suppliers. Everything you put on the web stays on the web.”

After having been identified, the shortlist is manually reviewed by experienced underwriters with the most promising businesses invited to apply for a loan. If they do so, even more data becomes available to Just Cashflow before a final decision is made as applicants then give permission for it to access further data such as full credit reports. See Entrepreneur Club article Five reasons loans are declined for more information on what will be considered by loan underwriters at this stage.

Expect more automation

Rob Warlow, founder of SME loan broker Business Loan Services, says he hasn’t seen any other lenders deploy similar practices to Just Cashflow yet, but he wouldn’t be surprised if they are working on similar initiatives: “In today’s environment, this is the next logical step in loan underwriting. If useful, alternative data is out there, why not use it? And we have lots of brainpower in our ‘Fintech’ sector looking into things like this.”

What he also points out is that for larger loans, lenders are looking at similar data points anyway – such as a detailed assessment of a business owner’s experience – but are doing so manually. He says: “What is new here is the process of automating these assessments and making it efficient for lenders to use this data to assess smaller loans. This is only economically feasible for most lenders right now when it comes to larger loans.”

Rob sees these developments in automation as a positive. “For brokers like me, it could be seen as a form of cutting-out-the-middleman because you have lenders approaching businesses directly with most of the data they already need, so a broker isn’t needed. But if this development helps businesses to scale-up faster it gets them to the position where they will be looking for larger, more complicated loans (where brokers would typically be needed to advise companies on their loan applications) sooner – because they are growing faster. And that’s a great development for everyone.”

 

 


The opinions expressed by third parties are their own are not necessarily shared by St. James’s Place Wealth Management.

1. Just Cash Flow plc, February 2020.

Entrepreneurs’ Relief changes from £10 million to £1 million

The March Budget saw the Chancellor announce that Entrepreneurs’ Relief is being scaled back from £10m to £1m – how does this affect you?

Entrepreneurs’ Relief changes from £10 million to £1 million

If you’re a business owner, we’re sure you’ll agree that we’ve all been navigating some interesting challenges in recent times: an election, the Brexit process, the flooding that’s affected much of the UK, and Coronavirus.

To add to this, in the March Budget, we saw the Chancellor announce that Entrepreneurs’ Relief is being scaled back from 10m to 1m, which means the current tax benefit of 10% only applies to the first £1m.

Malcolm Murray, Director of Entrepreneurs Hub, reflects on the news: “As a business owner, you might be asking, “Why didn’t I sell my business sooner?” but it’s important to remain positive and have perspective. There will always be speculation and there’s no greater constant than change, so it’s always important to look at the bigger picture.”

Here are 3 questions that every business owner should consider now that Entrepreneurs’ Relief has changed.

 

1. Is the tax benefit of Entrepreneurs’ Relief the only reason you’d want to sell your business?

“In my 15 years of helping business owners sell their companies, I must honestly say I can only remember one business owner who came to us saying that the tax benefit was the main driver for wanting to sell his business”, says Malcolm.

Interestingly, when Malcom explored further, the fundamental reason for him and his wife was actually that they had built a solid business, but they’d worked themselves into the ground in the process. That was putting a lot of stress on them, so it was time to move onto their next chapter.

The reason most business owners want sell up is because they have come to the point where they know the timing is right for them and their family to exit. It can often be because they’ve lost their passion or the business has become stressful, so they want to move on and turn all those years of hard work into cash.

 

2. Do you wish you had rushed and sold your business just to beat any changes?

If you’re currently in the process of selling your business, then undoubtedly, you would have wanted the deal completed sooner. However, if you hadn’t started the process yet, then the implications of rushing a deal through could have impacted the value of the sale, especially if your company was not fully prepared to be sold.

Only start the sale process because you really want to sell the business. Secondly, only start the process after you have had a review with a reputable adviser who can confirm that now is indeed a good time to go ahead.

 

3. Would you agree that we can’t change the past, but we can change the future?

Selling your business and only paying 10% tax on the first £1m of the proceeds is still an