PRIME business club

Anne Walsh, 53 from Manchester, went from BT operations manager to quirky craftswoman, when she applied for voluntary redundancy.

BT operations manager Anne Walsh was the breadwinner for a disabled husband and three children. Fed up with her office job, Anne promised herself she would change her life when she turned 50. Anne applied for voluntary redundancy, sold her Porsche, and bought a van. She began to make gifts for family friends, and to sell on eBay. Anne made flowers out of socks, cakes and trifles out of soap and face cloths, and large cakes out of baby’s nappies. Anne says ‘the cakes definitely started as a hobby, but more and more people wanted them, and it soon became a business.’ My Unique Gifts now caters for a wealth of occasions from births and weddings to dog and cat pampering, with products ranging from £3.95 to £55.

Research

Anne’s first idea was the ‘nappy cake’. This is a fake cake made of disposable nappies, which Anne saw on holiday in San Francisco in 2001. Anne researched the product on the Internet and found that though extremely popular in the US and Canada, the nappy cake was barely on the British market. Anne purchased a ‘teach yourself’ DVD, and began to experiment. My Unique Gifts now boasts a whole range of nappy cakes from single to five tiered, complete with 96 nappies, two bottles, a pair of baby socks, baby suit and matching hat or bib, receiving blanket, crystal keepsake, photo frame, and soft toy.

Training

When Anne registered with PRIME, she was told where to go for business advice. She attended a free HMRC Business Advice Open Day, where PRIME hosted a seminar on working for yourself. Anne then booked herself onto a free HMRC workshop on self-employment tax issues. Anne says ‘both events were extremely helpful in getting to know the basics.’ But she did leave some things to the professionals, and hired a bookkeeper to document her accounts. The rest of Anne’s training was simply trying new things and learning as she went along.

Marketing and development

An early marketing tool was to circulate an email round Manchester College. A family friend, worked at the college, and sent out pictures of Christmas cakes that were on offer. This was very successful, and large orders flooded in. Anne now keeps her own mailing list, and sends out details of new gifts, or seasonal promotions.

Anne attended a craft fair with her Daughter in the Lake District, and was thrilled by the positive feedback her gifts received. The buzz spurred her on and Anne began to go to craft fairs and farmer’s markets on a regular basis. This brought in repeat customers, and the business began to expand.

Anne is now considering larger trade markets and has applied for her first two day event, the Stars and Stripes Classic American Car Show in Cheshire. Larger markets are £25 - £60 for the pitch; more expensive than the small craft fairs Anne is used to. But they provide a great opportunity to hit a larger and more commercial audience.

When going to get a logo painted on her van, Alan, the graphic designer gave Anne a tip. He recommended investing in a 0800 number. This means that if Anne’s real number (or ghost number) changes, the business line will remain the same, and customers will not be lost. The freephone number costs Anne about £60 a year. Calls cost an extra 4p a minute, but Anne keeps costs down by using her answer machine to take messages, then phoning people back from her landline, which has free minutes.

Anne’s main marketing weapon came in the form of stepson Steven Walsh. Steven is the Director of Marketing Success Unlimited, a company which specialises in branding and marketing campaign management, with a focus on online marketing. Steven provided Anne with business cards, letterheaded paper and flyers, and crucially created her website and online shop. This made Anne’s products more visible and accessible to customers outside Manchester. It also allowed people to pay by credit or debit card, which made the transaction process easier and safer for customers.

Problems

Anne’s main problem was finding suppliers that would keep the costs down. Where the Internet had proven an invaluable research tool in other areas, a lot of old warehouses were just not online. The Internet pointed to expensive and commercial manufacturers, and Anne had to dig a lot deeper to find wholesalers that provided a cost-effective price. Word of mouth became the best resource here. Anne asked friends that worked in retail, and got some good leads. Finally she was able to get her materials at a bargain, and bring down the asking price of her own gifts.

Future

Anne’s business is steadily growing and expanding. With each request, more socks and nappies are taking over the house. On 1st June 2009, Anne opened a shop and workshop, giving her business more space and achieving her target for 2009.

Contacts

Anne Walsh
53B North Road
Droylsden
Tameside
Manchester
M43 6NN
Freephone no: 0800 043 7156
Website: www.myuniquegifts.co.uk

Free Cobwebs (information factsheets) on renting, buying and choosing business premises are available from PRIME on request.

Anne Martis, 58, from Banbury started her own walking holiday business after being made redundant in the summer of 2008. Less than a year on, Walk the Landscape is in full swing offering over 15 different guided walks. Anne says that ‘walkers get to know about England’s rich history and nature, as well as getting exercise and companionship.’ Prices are £25 per person for a day walk or £60 for the family, £230 per person for a 2 night weekend, and £590 per person for the week.

Walk the Landscape is a family business offering knowledge and experience of the Cotswold and Oxfordshire countryside. An average walk lasts 5-7 miles, but this can be made longer or shorter depending on ability and preference. The commentary can be anything from the Norman Conquest of 1066, mythological stone circles, Jane Austen, or the Cotswold Olimpick Games. And the group can refuel halfway through, and socialise with the locals at a traditional rural pub.

Anne first thought of Walk the Landscape, to subsidise her pension. But when she was made redundant from her job as a project manager in software development, Anne took the opportunity to do something about it. Anne’s first step was to seek training.

Training

PRIME recommended Enterprise on Track, a free course for older women starting up in business, at London Metropolitan University. The course consists of ten day-long sessions, spread over 20 weeks, and is focused towards health and community based businesses. London Met offers a selection of courses specific to women starting up in business, so they are worth checking out.

Anne also attended a Business Link course in Oxfordshire, for business start-ups. Here she learnt about public liability, which was essential in protecting the business legally. Anne devised a thorough booking form, so that she was aware (and welcoming) of any health problems, disabilities, or special requirements.

As well as the basics, Anne needed some qualifications for health and safety. She says ‘all our guides are now trained in first aid’. Walk the Landscape is therefore prepared for any accidents that may occur while the group is walking.

Research and Preparation

Anne boasts degrees in Botany and Agricultural Science, so she knows what to say about the flowers and wildlife. Anne’s historical knowledge of the area came from the five years she spent volunteering as a warden for the Cotswold Area of Outstanding Natural Beauty. As Anne got to know the Cotswolds by foot, she researched its heritage, and there began the desire to share what she had learnt with the community.

Anne did a lot of research in the local library. She searched the Internet, read popular history books, and discovered many things for the first time. Finding out about local Roman remains, was a particular surprise.

Establishing a presence

One way to make her business known was to get a website. Anne had previously done a Open University course in Website Design, which taught her how to use html. Anne was able to create an efficient website, using only Microsoft Word 2007, and skills she had learnt on the course. The website includes detailed descriptions of the walks available, a downloadable brochure and booking form and information about accommodation and the local area. As a special flourish, the site even has its own weather forecast.

Anne recently gave the business more authority, by registering as a Sole Trader. A Sole Trader has complete control of their business, as opposed to a Partnership; where two people have control, and a Limited Company; where the business has legal independence from its owners. One advantage of becoming a Sole Trader is that you do not have to register before you start trading. Anne says the process was ‘surprisingly easy. I just made a short phone call to Companies House, and that was that.’ For more information on choosing or registering a legal status, contact PRIME, and ask for the information factsheet (or Cobweb).

Problems

Despite Anne’s website, publicity is a big problem. She says: ‘Potentially, I have customers throughout Britain and the rest of the world, but it is difficult targeting them effectively on a limited budget’. Anne has no external funds to support Walk the Landscape, which means she is financing the whole thing with her redundancy money.

So far, Anne’s main cost has been travelling to the London Met. There is no equipment to buy, premises to rent, or employees to pay, so Anne has managed to set the business up on a remarkably low budget. Anne does not have to rely on loans or sponsorship to keep the business moving, which is great. But it does mean some of her options for growth are restricted. For example, Anne can probably not afford to target large circulation magazines or newspapers on a regular basis.

Anne is combating the publicity issue, by slowly building up a client base. She has devised a newsletter which people can subscribe to when they book their first holiday. By this means, Anne will gain regular customers. Other marketing strategies have been to give contact details to the South East and South West tourist boards, become linked to holiday websites, and provide hotels with leaflets to put in their foyers. Anne’s next idea is to approach schools, which will provide large numbers, and benefit from her educational style.

Contacts

Anne Martis
Tel: 01295 811003 (home) 07718 660070 (mobile)
Email: Anne.m@walkthelandscape.co.uk
Website: www.walkthelandscape.co.uk

Companies House
Tel: 0870 333 3636
Website: www.companieshouse.gov.uk

London Metropolitan University
Enterprise on Track - 020 7716 7015
The Centre for Micro Enterprise - 020 7320 1573
Email: hilary.farnworth@londonmet.ac.uk

PRIME
Astral House
1268 London Road
London
SW16 4ER
Tel: 0800 783 1904
Email: prime@ace.org.uk

Made redundant at 52, and suffering from Myalgic Encephalopathy (ME), the Job Centre told Tony Palmer that his chances of paid employment were slim. Tony took matters into his own hands and started his own engraving business.

Crystal Mountain Glass sells engraved awards, wedding gifts, decanters, bowls, and paperweights, as well as rock tablets with multilevel carving, and Swarovski crystals. Tony bulk buys the glass from a supplier in Scotland, and engraves it in a 12ft x 15ft workshop in his back garden. Prices vary, with engraved pet tags at £5, Swarovski Suncatchers from £15, and Champions Trophies at £250.

Tony was made redundant in April 2008. He applied for jobs, but was never granted an interview. Tony suspected this was due to his age and health issues, and the Job Centre agreed with him. Tony says ‘I sat down and discussed it with my wife Marion. We chose self-employment because it was the only option’. On the 1st September 2008, the business was launched.

Starting up

Tony cashed in his pension to buy his equipment and start the business. The equipment cost around £12,000 as some of it had to be imported from America. By giving up his pension, Tony runs the risk of relying on job seekers allowance if the business is unsuccessful. Yet Tony is confident in his ability, and so far, all is going well.

Tony’s first step to becoming self-employed was to ‘get advice’. Tony attended free HMRC workshops on tax returns and VAT. This helped Tony decide whether to be VAT registered or not, and helped him understand about accounts and bookkeeping. Tony is now thinking of taking on an accountant to save time, but is clued up enough to know what is what.

Tony took part in Business Link workshops, which focused on starting in business, and creating a website. He plans to attend a further course on increasing website traffic, and has requested an information factsheet (or Cobweb) on the same, from PRIME. Tony’s main tip in becoming self-employed is ‘Get as much advice as possible. It is free and always valuable’. You can find details of free workshops in your area by going to www.primebusinessclub.com/category/events.

Marketing

Tony and Marion attend craft fairs each month. A pitch can cost anything between £70 and £170 for a 6ft area. The fairs are a way of spreading the word, and can often bring in large orders a few months down the line. Tony says ‘people will talk to us at an event, then a sports day or award ceremony will pop up, and they’ll remember and give us a call’.

Tony wanted to employ a website designer, but every quote was 4 figures so he did it himself instead. Tony went to www.123-reg.co.uk and bought a domain name. It was then about £70 for a software package, which allowed Tony to upload information via already formatted templates.

When looking for a glass supplier, Tony made a shrewd move with The Glass Scribe International in Scotland. As well as getting a good deal on wholesale glass, Tony became sole distributor for The Glass Scribe in London. This meant that Tony got a free listing as a stockist on The Glass Scribe’s website, as well as being able to show off his collection to those picking up orders.

Networking

Tony attends a small business club, once a month, in Thurrock. ‘It is good to mix with businesses that are in different stages of development’ says Tony. People share knowledge and tips, and it is also a good chance to gain contacts, and talk about your own product.

Problems

Tony suffers from Myalgic Encephalopathy (ME). ME can cause severe fatigue and malaise after mental or physical activity. Tony’s old job demanded long periods of visual processing; about 60% of the time dedicated to looking at a computer screen. Tony would go for so many weeks, but then have to take time off to recover. Now his own boss, Tony can have what his specialist calls ‘a modified living style’. He brakes up his time in front of the computer, interchanging it with other aspects of the business. As a result, Tony’s ME becomes more manageable.

Seven months after Crystal Mountain Glass began, and the business is beginning to fund itself. But work is sporadic, and Tony and Marion sometimes have to dip into their bank account to keep the cash flow going. This is a temporary solution, until orders become more regular.

What Tony really wants, is enough profit to support a showroom or a shop. That way people could peruse the collection first hand, just like they do at the craft fairs. With an increasing customer base, and regular marketing, it is surely just a matter of time.

Contact

Crystal Mountain Glass
23 Somerset Gardens
Basildon
Essex
SS13 3JJ
Tel: 07504 779038
E-mail: tony.palmer@crystalmountainglass.co.uk
Website: www.crystalmountainglass.co.uk

Date: Thursday 28 May 2009 - Friday 29 May 2009

Time: 10am to 5pm both days

Venue: ExCeL London, One Western Gateway, Royal Victoria Dock,London E16 1XL

Status: PRIME exhibiting

PRIME has a stand (740) at this excellent free show. Come and talk to us.

Business Startup 2009 is a large event with 230 exhibitors and a programme of over 140 seminars. Both the show and the seminars are free. You can order tickets online at www.bstartup.com, or phone 0800 328 0467.

GETTING THERE
ExCeL London is located 10 minutes from Canary Wharf, in the heart of the former Royal Docks. The site is bracketed by three Docklands Light Railway stations, and has parking for 4,000 cars. Venue details.

Gill from Wigan asks:

Are there any tax incentives to run a business from home?

Emma Jones, Business woman, author and editor, replies: 

Hi Gill

 There are many incentives to run a business from home! If you’re already doing so, you’ll be feeling the benefits of low overheads and no commute. But yes, on top of that and in answer to your question, there are some tax benefits too. The biggest one is related to the expenses you can claim when running your business from home. The simplest way to carry out the calculation is to add up the annual costs (as applicable) of:

• Gas / electric / solid fuel
• Council Tax
• Contents / buildings insurance
• Water rates

Next, simply count up the number of principal rooms in the house (kitchen, reception rooms, bedrooms, bathroom etc). If there are seven, and one is used for half business, half personal (eg spare bedroom / office) then half of one seventh of these expenses are allowed and can be claimed against your tax bill. You can also claim for the business element of telephone bills and business travel.

Other planning you can do, is issue a number of shares to your spouse or partner so they are able to receive part of a dividend paid for the year, and you can claim their personal allowance.  Also, did you know that paying your children to work in the business is a way to reduce tax? As long as your children are over 13 and perform appropriate tasks within the business for a sensible salary, there is nothing to stop you paying them for work done to reduce your business tax liability.

We have many features on this topic at www.enterprisenation.com so I hope you’ll visit to take a look. It would be well worth your time - and will cut your tax bill!

 Emma Jones is founder of Enterprise Nation the home business website, and author of Spare Room Start Up - how to start a business from home.

John Lamb, editor of Ability magazine, replies:

 I have a home office and there are no tax incentives to encourage people to work from home; rather the opposite. Local authorities don’t want people carrying out businesses from residential properties that might disturb the neighbours or cost them lucrative business rates. However, you can claim a proportion of your home heating, lighting, maintenance and rent or mortgage against business expenses (your accountant will work that out for you).

John Lamb is the editor of Ability magazine, a campaigning publication for people who have difficulty using IT.

There are no special tax incentives of running a business from home. However, expenses incurred wholly and exclusively for the purposes of the business should be deductible in calculating the taxable profits of the business - either as revenue expenses (for example, heating, telephone, lighting) or under the capital allowances system (for example, in respect of computers, furniture and other qualifying plant and equipment). In many instances, the “wholly and exclusively” rule may not be satisfied and the local inspector may agree to an apportionment on a just and reasonable basis for the purposes of determining the amount of tax relief available.

One trap to be careful of is the restriction which could apply to the principal private residence exemption. The exemption is available under the capital gains tax regime in respect of gains arising from the disposal of a principal private residence - the gain normally is free of tax. However, if any part of the house is used exclusively for business purposes, then the capital gains tax exemption may be limited. So ensure that no space is used exclusively for the purposes of the business, and substantive private use is made of the space from which the business is run.

 Vishvas Kanji is a Tax Consultant for Mishcon de Reya Solicitors. You can find out more about his services here.

Disclaimer: The opinions expressed are those of the author(s) and are not held by PRIME unless specifically stated. The material is for general information only and does not constitute legal, accounting, tax or other personalised advice. You should not rely on this information to make (or refrain from making) any decisions. It is not a substitute for independent, professional advice for your own particular situation.

About Ask the Experts

PRIME has assembled a team of business experts who have generously volunteered to answer your questions for free. You can read more about them here, or Ask your own question.

Expect the fear of a pandemic and measures taken to combat it to have an impact well in advance of the disease itself, if or when it arrives.

Most of the advice so far seems to be aimed at large businesses, but many of the principles still apply. Have everyone’s mobile phone numbers to hand, backup computer and web data properly in case services go down. Observe enhanced hygiene practices. Think through the implications of things like restrictions on travel, the closure of venues and the unavailability of key services and staff.

Time for preparation not panic (PDF) - thorough discussion of possible impact from insurance broking giant and risk management specialist Willis.

Gartner business continuity blog Frequent updates but from a very American perspective

Basic facts about influenza pandemics - PDF briefing from European Centre for Disease Control (ECDC)

Personal protective measures - PDF briefing from ECDC goes into more detail than most

Latest on outbreak from European Centre for Disease Control

A father’s wish to help his daughter with her school work was the spark that led to the creation of a growing international business. Anthony Hemmings’ Swan Neck Pen is now sold in over 24 countries.

Being left handed, daughter Amy could not see what she was writing. She suffered from bad wrist pain and began to fall behind. Her confidence plummeted. Amy tried other left handed pens on the market, but none of them helped. So father Anthony Hemmings, 53, and friends Mike Deacon, 50, and Dillon Samson, 35 took some standard plastic pens, melted them down and experimented with reshaping them in different ways. It was not long before the first Swan Neck Pen was born, and Mike, Anthony and Dillon set up M.A.D Associates Ltd, (the M.A.D being an acronym of their names).

The Swan Neck Pen has an S-bend neck, which loops over the wording as it is written. The writing remains unsmudged, and better visibility helps prevent common learning mistakes such as reversed letters. Anthony says the design also combats wrist ache and repetitive strain injuries. Anthony’s main goal now is to get the pen into schools.

Amy took about ten minutes to adapt from her ‘fist’ technique, to the more comfortable position offered by the Swan neck. Left-handed friends and parents soon began to make requests for one of the same. ‘When it got to about 50 I thought, hang on there’s a market for this’. So in 2004 Anthony started to investigate manufacturing the pens on a larger scale.

Anthony and his wife Heather, 44, invested their savings to pay for production and legal costs. Banks had no money to lend them and the company directors were often considered ‘too old’ to get meet the criteria for a business grant. One year on from the market launch the profits are still being used to help finance the business. Anthony warns others to ‘really think about it first’.

A key breakthrough was hiring a good solicitor. ‘When we first went to the manufacturers, all we had was a confidentiality agreement’ explains Anthony. ‘We know now it’s not worth the paper it’s written on’. The solicitor knew about the small print, drafted all relevant documents, and helped get the trademark registered in the UK, Europe, and a number of other countries. The product also had to be patented and British Standard tested. But ‘it was money every time’.

Time was another issue. Anthony had to give up his job as an antique dealer to put in the necessary hours. Meanwhile, Mike and Heather seem to spend every spare moment on the business, with the phone, (or several phones), constantly ringing in their Gloucestershire office.

To develop the product, Anthony and Mike had to do their research. But talking to the general public was more problematic than expected. At a local shopping mall, the team discovered they were not officially allowed to approach people, and ended up having to run off every five minutes to avoid getting caught. More successful ventures were events like the Balloon Fiesta in Bristol, where large numbers of pens were sold.

Some people were less enthusiastic. An early manufacturer refused to produce the Swan Neck Pens. ‘He was impressed by the design and could see the benefits, but was just not convinced it would sell commercially’.

Anthony had similar problems with the education authorities. Contacting at the Department for Children, Schools and Families (DCSF), Anthony and Heather found it would not endorse the product. Despite possible benefits to health and education, the pen remains subject to schools’ individual discretion.

The company now has another plan to get pens into schools. A disposable Swan Neck is being created, making the pen much more affordable and appealing. A special school discount is currently being offered, to the same aim. Another development is to impregnate the pens with an anti-bacterial liquid, reducing germs passed on in the classroom.

As time goes on, Anthony and Mike are discovering different users the Swan Neck could help. Interest from the Middle East, Thailand and China illustrates that the pen could aid those who write right to left, as well as top to bottom. As the product does not need any adapting to fit this market, the company’s main job here is to decide which distribution channels to use. To do this, the team have devised a questionnaire to send to those wanting to be distributors, so they can assess each applicant before offering a contract.

You can find out more about Anthony and Mike’s business at www.swanneckpen.com  

William Cawley, 53 created a heritage walk with a terrifying twist, when he invented the Shriek in Leek ghost tour.

Bill first did the ghost walk in November 2005 as a fundraising event for Children in Need. Over 40 people turned up to be spooked, raising the charity £100. Seeing the opportunity to make money from the venture, Bill began to repeat the event for special occasions like Halloween, and for large groups coming into town.

Bill dresses up in old style hat and robes to set the sinister tone. The tour lasts an hour and a half, with Bill leading the group through some historical landsites, attributing ghoulish tales to them along the way. The groups fluctuate from 3 to 40 plus people, and can be anything from scout groups, international scientists, or supernatural enthusiasts. Bill describes the walks as being ‘like jazz; a basic theme but lots of variation’. While keeping a creepy focus, he tailors the experience to the group; giving out translations for foreign students, and incorporating architecture, literature, art or culture for those with an interest. The tour finishes at a local pub, where participants can enjoy some food and merriment, and sometimes a live band.

Research

With a degree in History and Politics, articles in the Leek Post and Times, and an avid passion for local knowledge, Bill already had a wealth of information, ready to be unleashed on the public. Bill did extra research by placing an advert in the local paper asking for people’s experiences of ghosts in the area. Bill also studied back papers from the Post and Times’ archives, telling him of famous incidents and haunted buildings. Bill keeps his research fresh, so that his tour can change and develop.

Problems

Although Bill managed to do the tour fairly regularly - about once a fortnight, he found marketing a big problem. Without his own website, or help from the local authorities, Bill was unable to get enough visibility to keep the tour consistent. Conveniently, Bill was approached by Julie Lovatt of The Coffee Clique, also in Leek, who wanted to do something special for Halloween. Bill provided his services, beginning the tour from the coffee shop, while Julie stayed open late providing drinks for the returning customers. The pair now works together when there are festivals or events in Leek, and this brings in good publicity and numbers for both.

Though Bill has found ways to advertise, visibility is still an issue. Bill plans to combat this by setting up a website. He has received cobwebs (information for business factsheets) on ‘Developing and creating a basic website for your business,’ and ‘Choosing and using a website designer’ from PRIME which provide tips, advice and contacts for those wanting to explore this area.

Another problem was unemployment. It sounds obvious, but in the period that Bill was signed on, declaring the ghost walk would mean losing benefits, and paying taxes. Shriek in Leek was not reliable enough to replace these funds, so the absence of work meant there was no ghost tour for about 8 or 9 months.

Future

Bill works part time fundraising for local hospice Douglas Macmillan, and part time writing Port Vale Tales; the history of a local football club, funded by The Heritage Lottery Fund. Soon the latter will come to an end, and Bill will think about taking on his business full time. One idea is to invest in a mini bus, which will enable Bill to tour around the Moorlands area. To do this Bill will need funding. PRIME are currently working with Zopa on the Olderpreneur Loan Scheme. You can find details of eligibility and how to apply here. Business Link has information about finance and grants on their website.

Contacts

Bill Cawley
Tel: 01538 382 966
Email: williamcawley55@btinternet.com

Last week the basic state pension went up to £95.25 for a single person and £152.30 for a couple. This isn’t much, and the earliest you can get it is when you reach 65 if you’re a man (so you’d qualify if born on or before 5 April 1959) or 60 if you are a woman (born on or before 5 April 1950).

For these reasons people have been heavily encouraged to top up state provision with some private scheme. And people running their own businesses often invest in that with a view to selling it or some assets to fund retirement.

There’s an interesting article in the Observer about the pros and cons of different ways of saving for your retirement. Basically it’s saying private pension plans are not all they are cracked up to be, particularly because they are typically inflexible about when you can cash them in.

Taking control of investments yourself may be better than leaving it to a pension fund manager. Here’s an extract:

“For many years I have been very anti-pensions,” says Colin Jackson, an independent financial adviser and director at Baronworth. “Yes, you get tax relief on your contributions, which is a great incentive to invest, but when it is time to retire and the market is against you I think the technical term is: ‘You’re stuffed.’ ”

Jackson does have company pensions from over the years but says he is “bitterly disappointed” with their performance. He thinks property is a far better medium- to long-term investment, followed by Isas, with pensions at the bottom of the pile. He also says that people should look beyond residential to consider commercial property.

“Many years ago we decided to buy the building we work in,” he says. “That is now my pension.”

The article estimates that £100,000 invested in property 10 years ago would have turned into just under £221,000 now - even taking into account recent house price falls. Had that £100,000 been put into an average instant access savings account, it would have grown to £129,000 (not inflation adjusted), while it would have shrunk to a shocking £91,646 if it had been invested in an average UK-based equity fund.

More at Observer site

What can you do if you don’t have the money to invest in anything?

Well, working till you drop may be the only option.

If you can manage to keep working beyond state pension age it’s even possible to convert the pension you would have received into a lump sum for when you eventually do retire. You don’t lose out by continuing to work.

Here’s an example from the official Pension Service site, run by the Department for Work and Pensions.

Ahmed decides to put off claiming his weekly State Pension of £105 for three years. When he finally claims his State Pension, if he chooses a lump sum, he will get a lump sum of around £18,000 (before tax) as well as his normal weekly State Pension entitlement.

You can find out how much you could get by putting off claiming your own state pension by phoning the Pension Service’s Forecasting Team on 0845 3000 168

Sue Jones from Leeds asks:

I am unemployed and receiving jobseekers allowance. I have so far spent approximately £3000 on my new business. I cannot go any further because I need funding to run my business for the first couple of months. How can I get a loan or help with funding with a not too good credit record? I have a business bank account set up ready and waiting.

Nicola Dickins, MD, trainer and consultant, relies:

The Government have launched a new website: www.realhelpnow.gov.uk/ where you can download the help available for businesses in your area. Take a look at the Real Help for Women section, on page 25. It details new incentives for women on jobseekers allowance who have set up their own business, and includes funding for the first few months.

Also have a look at www.capitalforenterprise.gov.uk/portfolio.html as you may be able to apply for equity against a loan from the Aspire Fund.

Have a look at www.businesslink.gov.uk/realhelp there is an Enterprise Finance Guarantee that can help you obtain a loan.

Nicola Dickins is the founder and Managing Director of Make it Happen Consultancy Ltd.

Disclaimer: The opinions expressed are those of the author(s) and are not held by PRIME unless specifically stated. The material is for general information only and does not constitute legal, accounting, tax or other personalised advice. You should not rely on this information to make (or refrain from making) any decisions. It is not a substitute for independent, professional advice for your own particular situation.

About Ask the Experts

PRIME has assembled a team of business experts who have generously volunteered to answer your questions for free. You can read more about them here, or Ask your own question.

Rob Goddenough from Crawley asks:

I am a gutter cleaner. What is the best form of marketing with a low budget? I have thought about leaflet distribution and local newspaper advertising. Are these the best methods to use?

 
Robert Tull, Chartered Marketer and Business Link expert replies:

There is an old saying that half of advertising money is wasted. The problem is identifying which half.

Most small businesses do not identify a separate marketing budget in their business plan, but it’s very useful to do so. As soon as you get a new business phone number, you will be contacted by numerous newspaper, magazines or directories trying to sell you into their next ad feature. Surprise surprise, you will be told that it’s ideal for your business, but hurry as space is scarce and the decision must be made now for that special deal.

It’s very easy to say yes to a persuasive salesperson and if you say yes too many times you will have spent your yearly budget in the first few months of your year.

So plan out a Marketing budget over a 12-month period as you need regular marketing of some kind every month, and it makes it easier to have a reason to say No to the next good offer on the phone.

Try different things until you find the ones that work best for you. Whatever media you use, you should try and monitor what works, so make a point of asking your customers or enquirers where they saw your name /advert /and why they contacted you.

The best marketing of all is word-of-mouth recommendation. Get into the habit (it’s not easy for some people) of asking your customers to recommend you to their friends and family.

If you are in a business-to-business service industry, leave leaflets or business cards with your existing customers. You never know when new possible customersmight need some emergency help.

So leaflets are a good idea. Putting them through letterboxes is also good as you are in control of which areas you are targeting. Some newsagents will allow them into their delivered papers at a small cost (cheaper than having inserts added by the publisher at source). The same newsagent also may also have a notice board for you to pin a leaflet or business card to at a small weekly rate.

Also consider joining a networking club or attending a business breakfast meeting - and give leaflets or business cards to all attendees. Many will allow you to talk about your business and promote your services, for a small fee, so practice a short speech in front of a mirror, so you gain confidence in delivering a 60-second advert for your business.

Contact other service industries in your local area and create a small circle of useful contacts who will promote your service to their customers. In return you will do likewise, so pick ones ou would be happy to recommend. Many homeowners are looking for reliable tradespeople to use when the unexpected happens.

Find out how much it costs to join The Chamber of Commerce in your area, or the Federation of Small Business. These are both ways of widening your contacts and finding out about events attend to promote your business. It will cost to join so weigh up the benefits before deciding whether joining is worth it.

Have a look at the Business Link website for more hints and tips for all areas of your business. Consider going on any free workshops that may be available in your area, to gain new skills and ideas - and make business contacts.

Finally visit your local bookshop or library and have a browse through the latest books on marketing and advertising. You will almost certainly find some simple tips and new ideas that are worth trying.

Robert Tull leads the team of Enterprise Awareness Managers at Business Link in the East of England,

Nicola Dickins, MD, trainer and consultant, replies:

Contact your local free paper (editorial dept) and tell them you’re a local business and you would like to write an article about your business. They are really interested in local business success stories at the moment. You may want to do a competition where you offer the winner free gutter cleaning.

John Lamb, editor of Ability magazine, replies:

John Lamb is the editor of Ability magazine, a campaigning publication for people who have difficulty using IT.

About Ask the Experts

PRIME has assembled a team of business experts who have generously volunteered to answer your questions for free. You can read more about them here, or Ask your own question.

PRIME has updated its popular free
“Working for YOURSELF guide, which explains sales, marketing and preparing a business plan in a practical way for people setting up their first business.

You can download it as a PDF immediately here, while we are getting this new paper version printed.

We do still have some paper copies of the previous edition, so if you like email us your details and we’ll post you a free copy. The main differences between the new and old versions are changed contact details - the basic text remains the same.

The guide concentrates on the subjects many people tell us they are least confident with - sales, marketing and putting a viable plan together. It doesn’t cover everything, but at only 40 pages long it’s quick to read and inspiring.

Contents
1. Customers and selling to them
2. Negotiating
3. Marketing
4. Setting prices
5. Business model, business plan
6. Checking with reality
7. Sources of support
Business glossary

If you are downloading the PDF to print out on your own printer, the square format should come out OK on standard A4 paper as it’s the same width.

HM Revenue and Customs (HMRC) now has the power to raid ordinary homes without warning - if you are conducting a business somewhere on the premises. Running a home business is of course not itself illegal. The idea is to allow tax inspectors to check up on what you are doing and have a look at the records you are meant to be keeping.

These new powers were first mooted over a year ago, and came into force on the 1st of April 2009. The new rules give the tax inspectors from the Revenue side of HMRC similar powers to those Customs & Excise have long had against smugglers and VAT evaders. Basically they can enter your home without notice if they suspect you of wrongdoing.

According to Sue Holmes, head of national tax investigations at accountancy firm Smith & Williamson, “The many thousands of business people and sole traders who claim expenses for ‘use of home as an office’ should recognise that from next month, HMRC has the right to enter their home without prior warning to inspect business records.”

This article in the Sunday Times describes the changes - and the new scale of penalties, in more detail.

So what records should you keep?

Here’s HMRC’s own guidance on the records needed by the self-employed.

And here’s its basic guide to tax and self-employment.

Also useful if slightly out of date is The No-Nonsense Guide to Government Rules and Regulations for Setting up Your Business which you can download free from Business Link.

If this is all sounding a bit complicated this brilliantly simple sheet of paper from InBiz shows you how to calculate what you probably most need to know - how much tax you will have to pay for the year.

Jessica from Beccles asks:

Where do I find a free list of what I can legally claim as expenses? I am especially interested in what I can carry over to future years when I will be making profits to claim them against. Somebody recently told me I can ‘loan’ myself a start up loan which can be carried forward, for instance.

Tax Consultant Vishvas Kanji replies:

If you are self-employed, all expenses you incur wholly and exclusively for the purposes of the business can be set-off against the income of the business for the purposes of calculating your taxable income arising from that business. Furthermore, generally the nature of the expense has to be “revenue” in nature and not “capital” in nature.

The distinction between the two in most cases is quite straightforward, but it can get complicated at the margins. An item of revenue expense is likely to recur and not result in an enduring benefit (for example, rent, electricity etc). Capital expenditure does not normally recur with the same regularity and provides a benefit which lasts for more than one year (normally quite a few years) (for example, the costs of buying a computer or furniture or equipment). Surplus of such expenses over income can be carried forward and set-off against the income of the following year.

Certain types of capital expenditure would qualify for capital allowances - in effect allowing you to set-off a percentage of the expenditure against your income for tax purposes. The extent of the deduction would depend on the nature of the expense and indeed the size of your business. Typically, an expense incurred in the purchase of plant and equipment qualifies for capital allowances (plant and equipment would include computers and furniture). Sometimes the whole of such expense can be set-off against your taxable income (in the same way as revenue expenditure). More usually, only a percentage can be so set-off each year (so the deduction is spread over a period of time). For example, if you spend £100 on a desk, and the expense, say, qualifies in your case for capital allowances at 25%, you would get a deduction of £25 for the year of purchase, leaving you with a tax written down value of £75. In the following year you will get an allowance of 25% of the tax written down value (i.e £75) … and so on indefinitely. Then if and when you replace the capital asset and you sell the old capital asset, the sale proceeds are treated as income, to the extent that they exceed the written down value of the asset in your books at that time.
A simplified set of rules applies to small businesses.
You cannot get any tax relief for any loan you make to yourself for the purposes of your business. If however, you were to borrow the money, the interest costs could be a deductible expense of the business (provided the relevant conditions were satisfied).

Vishvas Kanji is a Tax Consultant for Mishcon de Reya Solicitors. You can find out more about his services here.

Disclaimer: The opinions expressed are those of the author(s) and are not held by PRIME unless specifically stated. The material is for general information only and does not constitute legal, accounting, tax or other personalised advice. You should not rely on this information to make (or refrain from making) any decisions. It is not a substitute for independent, professional advice for your own particular situation.

About Ask the Experts

PRIME has assembled a team of business experts who have generously volunteered to answer your questions for free. You can read more about them here, or Ask your own question.

Barbie has joined the ranks of the 50-plus, an event celebrated in characteristic style with an immediate facelift. Plastic surgeons at Californian-based manufacturer Mattel have given the world’s most famous doll “a more natural look, including a thinner jaw line, more almond-shaped eyes and fuller lips”.

It is notoriously difficult to judge people’s ages nowadays, as by and large people are looking much younger than their parents did at the same age. This doesn’t seem to prevent the all-too-common tendency by employers and some advertisers to lump all over 50s together as a single group, putting Baby Boomers and their elderly parents in the same category (often the same scrapheap). The mistake is to ignore the real differences in age, attitudes and ability to work between distinct generations.

In tune with today’s celebrity climate, let’s attempt to correct this by identifying some famous people born in the main years of the post-war boom. There are some surprises!

Selected Baby Boom celebrities by year of birth

1945: Ken Livingstone, Helen Mirren, Debbie Harry, Bryan Ferry, Rod Stewart - all 64 this year.

1946: Joanna Lumley, Susan Sarandon, Alan Rickman, Sylvester Stallone, Bill Clinton - all 63 this year.

1947: Alan Sugar, David Bowie, Iggy Pop, Hillary Clinton, Salman Rushdie, Glenn Close, Arnold Schwarzenegger, Elton John - all 62 this year.

1948: Prince Charles, Ozzy Osbourne, Samuel L. Jackson, Sven Goran Eriksson, Terry Pratchett - all 61 this year.

1949: Twiggy, Bill Nighy, Richard Gere, Duncan Bannatyne, Arsene Wenger, Martin Amis - all 60 this year.

1950: Richard Branson, Jeremy Paxman, Julie Walters, Bill Murray, Stevie Wonder, Robbie Coltrane - all 59 this year.

1951: Gordon Brown, Kevin Keegan, Michael Keaton, Jane Seymour, Sting all 58 this year.

1952: Vladimir Putin, Jenny Agutter, Sharon Osbourne, Liam Neeson -
all 57 this year.

1953: Tony Blair, Victoria Wood, Kim Basinger, Pierce Brosnan, Keith Allen, William Petersen - all 56 this year.

1954: Bob Geldof, Michael Moore, Annie Lennox, John Travolta, Jackie Chan - all 55 this year.

1955: Bill Gates, Steve Jobs, Bruce Willis, Kevin Costner, Ian Botham, Alan Hansen, Lesley Garrett - all 54 this year.

1956: Rowan Atkinson, Kim Cattrall, Mel Gibson, Martina Navratilova, Sebastian Coe - all 53 this year.

1957: Stephen Fry, Paul Merton, Daniel Day-Lewis, Dawn French, Donny Osmond - all 52 this year.

1958: Madonna, Prince, Sharon Stone, Michael Jackson, Kate Bush, Lennie Henry, Viggo Mortensen, Marg Helgenberger, Miranda Richardson - all 51 this year.

1959: Hugh Laurie, Theo Paphitis, Deborah Meaden, Ben Elton, Morrissey, Linzi Drew, John McEnroe, Kevin Spacey, Val Kilmer, Rupert Everett - all 50 this year.

1960: Nigella Lawson, Kristin Scott Thomas, Carol Vorderman, Hugh Grant, Sean Penn, Gary Lineker, Colin Firth, Antonio Banderas, Michael Stipe, Bono, Richard Farleigh - all 49 this year.

1961: Barack Obama, Barry McGuigan, Eddie Murphy, K D Lang, Meg Ryan, Nastassja Kinski, Boy George, Frank Bruno, George Clooney, Heather Locklear, Michael J Fox, Peter Jackson, Robert Carlyle, Sarah Brightman, Tim Roth, William Hague, Woody Harrelson - all 48 this year.

Perhaps even more suprising are some of those born in 1969, who will all be 40 this year - Catherine Zeta-Jones, Jennifer Aniston and Jennifer Lopez.

Worth a read: Advice for Barbie at age 50