Finance in Dorset 2017 - Start Up Session

Finance in DorsetSam Chapman, Partner

Businesses trading for < 2 years…….

pkf-francisclark.co.uk

Structure of morning

• Background, Equity, Debt and Business Support (8.30am to 10am)

• Dorset Chamber • Banks: an overview• Equity and Grants• Growth Hub

• Coffee Break (10am to 10.25am)

• Funding, Business Support, Investment Ready and SME perspective (10.25am to 12noon)

• Start Up (trading for < 2 years) • or Established Business

• Lunch and Networking (12noon to 1pm)


• Business structure: Sole traderPartnershipLimited Company

• Red Tape: HMRC registrationAccounting systemsPensions and Auto-Enrolment

• Ongoing services: PayrollManagement accountsTax planning/remuneration strategies

Issues facing start up businesses


• Strategies for growth: Business plansCash flow projectionsAcquisitions/disposals of trade or assetsGrant funding

• Tax opportunities: R&DPatent BoxUtilising taxable losses due to CA’s and

investment

Issues facing start up businesses


• 10 minute presentations on:• Start Up Loans• SEIS/EIS• Investment ready x 2• Cloud accounting• University support• Support for exporters

• SME Perspective

Funding and support – for business < 2 years old

SWIG Finance

Start Up LoansPeter Casey

• Government-backed low interest loan (6%)

• Free business support• £500 to £25,000• Repayable up to 5 years • Trading up to 24 months• Loans to business owners• Can include business

purchase

Operating across the South WestOver 1,000 entrepreneurs with over £7.3 million in 4 years

Our clients are Award Winning!

Thank you for listening.

[email protected] 223 883

Investment ReadyRichard Wadman

Structure

Selecting the right funding• Options

• Choosing

Getting ready• General

• Specific



.

Selecting the right funding: Options

• Friends / family

• Angel investors

• Venture capital (VC)/ Private Equity (PE)

Equity• Banks

• Other organisations

• “Alternative finance”

• PE/ VC

Debt• Government

• EU

• Intermediaries

Grants

Crowdfunding


Selecting the right funding: Choosing

Understand funding

options and funders

requirements

Understand your

requirements

• Competitive process

• Tailor your pitch but do not change your your business model to fit

• Know the deal breakers: theirs and yours


.

• Business plan

• Projections

• Housekeeping

Getting ready: General


.

• Industry & current operations

• Future strategy

• Communicates “business case”

• Professional

• Especially important for start-ups

• Tailored

Business plan


.

• Realistic• Supported

• Add up• Underpin business case

• Profit & Loss• Monthly

• Cash flow & balance sheet

• Cash headroom

• Sensitivities – Negative & Positive

Projections


.

• Licences / contracts

• IP ownership in the company?

• Books and records in order?

• Tax VAT, PAYE/NI

• Statutory Accounts/management accounts

Housekeeping


.

• Equity

• Debt

• Grants

• Crowdfunding

Getting ready: Specific


.

Equity: Funders requirements

• Growth

• Often no market so are “locked in”

• Exit route and returns to the investor


.

Equity: Getting ready

• Be prepared to discuss valuation

• Investors expertise vs. loss of independence?

• Passive / active?

• Restricted matters?

• Potentially more subjective: softer skills / enthusiasm / excitement

• SEIS/ EIS


Debt: Funders requirements

• Cash flow – serviceability / headroom / sensitivity

• Security / personal guarantees

• Covenants – achievable / appropriate

• Government initiatives – eligibility


.

Debt: Getting ready

• Numbers and accounts in order

• Projections

• Credit rating

• Shop around


• Project – i.e. usually not for general expenses

• “Project” eligibility – sector, size, location…

• Ongoing compliance.

Grants: Funders requirements


.

Grants: Getting ready

• Timescale – prescriptive, process and panels

• Match funding

• Competition

• Cash flow – claim in arrears

• Admin

• Patience


.

Crowdfunding

• Debt / equity, subject to conditions

• “Reward”

• Variety of platforms

• Opportunity for exposure & feedback

• Marketing / enthusiasm for business

• Different but the same…

An Introduction to Cloud AccountingSam Chapman: Partner March 2017

Contents

• What is cloud?

• And cloud accounting?

• So, why?

• Demonstration

• Anything else?



What is cloud?

..What is it?

Cloud technology is simply to host, or store, data remotely rather than on a machine at your premises.


.

And cloud accounting?

• Multi-user & multi-location

• Immense server processing power

• Machine learning

• Application programming interface (API)


So, why?

• Time = Money

• Time saved on your books is time to invest in your business.

• Make business decisions based on real time data.

• Automated bank feeds

• Invoice recognition

• Dashboards

• Management accounts


Automated Bank Feed


Processing Power


Image Recognition


Image Recognition!


Dashboards


Dashboards!


Management Accounts


Anything else?

• Cash

• Automate invoicing and debt collection

• Sell your debtor book

• Pre-approved in-app finance?

• Integrated business solutions – link:

• Website, PayPal, Stock Management, CRM, etc.


.

Who to contact?

Jessica Tubbs MAATHead of CloudSourcing, East [email protected]

Sam Chapman [email protected]


SEIS / EISJulian Smith

Equity Investments

- Cash invested into a company in the form of subscribing for shares

- Most commonly, shares are either ordinary or preference shares

- Understanding what it means by giving up an equity stake in the business

- Tax incentives on offer for certain investments in ordinary shares


pkf-francisclark.co.ukpkf-francisclark.co.uk

.

SEIS / EIS

• Equity Incentive Schemes – offer of tax incentives to investors to encourage investment in start up / relatively new businesses

• Often considered where debt cannot be obtained (or only offered on unattractive terms)

• Given up an ownership stake in the business – how much are you willing to give up?

• HMRC’s view is that the schemes are aimed at companies with a high financial risk

pkf-francisclark.co.ukpkf-francisclark.co.uk

.

Tax relief for investorsRelief SEIS EIS

Income tax relief 50% (max inv. £100k) 30% (max inv. £1.0m)

CGT exemption Yes – after 3 years Yes – typically 3 years from date of issue

CGT deferral No Yes

IT loss relief Yes - potentially Yes - potentially

BPR Yes Yes

The above are subject to conditions and rely on continual qualification in the period after the issue of shares.


Seed Enterprise Investment Scheme (“SEIS”)

• Companies where trade is less than 2 years old

• Up to £150k can be raised through the issue of SEIS shares – limit reduced by any other State Aid received in the 3 years preceding the issue of SEIS shares

• New shares must be issued in return for ‘new’ cash

• Cash used for the purposes of a qualifying trade and spent within 3 years of the share issue

• Individual investors cannot be connected with the company

• Less than 25 employees / no more than £200k gross assets

• Numerous other conditions


Enterprise Investment Scheme (“EIS”)

• Typically for companies < 7 years old

• Can raise no more than £5m in any 12 month period – includes from any venture capital scheme and other state aid investment e.g. certain grants

• New shares must be issued in return for ‘new’ cash

• Cash used for the purposes of a qualifying trade and spent within 2 years

• Individual investors cannot be connected with the company

• Numerous other conditions


Practical considerations

• Is your company carrying on a qualifying trade?

• Applying for advance assurance to give investors certainty.

• Method for attracting investors – business angels, crowdfunding, equity funds

• Valuing the company and offer price

• Professional costs

• Steps to ensuring and monitoring compliance e.g. separate bank accounts

• Dual SEIS / EIS offer

Investor Ready : approachingthe bankPractical tipsMike Isaacs

Relationship ManagerNatWest Business Banking

The content of this document is classified as PUBLIC

02/05/2023The content of this document is classified as INTERNAL50

Mike Isaacs

Security may be required. Product fees may apply. Over 18’s only. Business Turnover of up to £2 million. Excludes refinance and Commercial Real Estate FinanceAny property used as security, which may include your home, may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it

Assessing an application, what do we look at?


You1

Contribution2

Business plan and Forecasts3

Affordability4

Credit history5


You

Why do you want to set up in business?

Support network

Contingency planning

Strengths and weaknesses


Contribution

Typically 50% contribution

Demonstrates commitment and confidence in your project


Business plan

Competition

Route to Market

Advertising and Marketing

Your background

Breakdown of costs

SWOT analysis


Affordability

Cash Flow Projections

Assumptions

Seasonality

Cost of your product

How much you expect to sell

Wages

VAT

Loan repayment figures


Summary

Have some cash behind you to get started

Have written a detailed Business plan and be prepared to answer questions about it

Have prepared a realistic Cash flow projection

Have sought help from professionals should you need any help with preparing the necessary information


Boost your Business with NatWest

Lucy Kitcher Business Growth Enabler

[email protected] 636336T:LucyKitcher2

Each month we host the Boost Board which is a free event open to local businesses looking to grow.

2nd Wednesday monthly – 8th March9.30 -11.30The Factory, Alder Hills

Details are on Eventbrite or ask Lucy.

mailto:[email protected]

Regional Economic Engagement

Prof Nigel Jump

What we do

Education Research

Professional Practice

Connectivity Of Our Strategies

Regional Economic Engagement

Community & Civic Regional Engagement

Global Engagement

How do we interact with Industry and Commerce?

• Via Knowledge exchange (KE), a process which brings together academic staff, users of research and wider groups and communities to exchange ideas, evidence and expertise.

• Overall aim is to contribute to economic, social, cultural and environmental benefits to society.

Strategic & Internationa

l PartnersIncubat

or

Public Engagement

Business Intelligence Reports

Festival of Learning

Festival of Design &

Technology

Festival of Enterprise

BFX Festival

Inaugural Public

Lectures

General Interest

Seminars

Regional Economic &

Environmental Impact Model

Data Portal

Round Table Discussion

Groups

Research, knowledge exchange and CPD

Research• Global Security, Finance, Economics,

Tourism, Health, Creative and Digital, Engineering, Environmental Science and many more…

• All Faculties offer CPD opportunities

Funding Opportunities

• Knowledge Transfer Partnerships (KTP)– 3-way project partnership– Match-funded PhDs

• SMART awards – Proof of concept– Proof of market– Development of prototypes

• European Funding• Horizon 2020

Student Interaction

• Placements and Careers– 100% students offered placements– 92% of graduates are employed or in further

study within 6 months of graduation• Student Project Bank

Student Project Bank

• Launched February 2016• External projects needed for students to

work on as part of their academic studies– Cannot be business-critical

• Student-centred initiative • Benefits students and Industry sponsors

Our Commitment

To help create a prosperous, economically dynamic and sustainable regional economy.

To identify and support development opportunities that will add to the region’s economic capacity and wealth.

Andrew J Large CMAInternational Trade Adviser

Your Partner for International Trade

07469 [email protected]

Export for Growth: ERDF


https://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiUi6O43qjJAhWFYA8KHZIeB3EQjRwIBw&url=https://www.cmsdistribution.com/cms-irish-operations-boosted-by-enterprise-ireland-and-european-regional-development-fund/&psig=AFQjCNE63fBVSsLqdcBqbbr_4qeNeuSRww&ust=1448443415115343

New support programmes for SME’s

KnowledgeKnowing what to do – and why do it

Skills Knowing how to do it – and with what

Confidence Readiness Effectiveness

Baseline ServiceExport Savvy

Trade Development SupportE-Commerce

Export OpportunitiesOMIS

High Value OpportunitiesEvents and missions

DIT Core

Export Essentials

Ready for Export (Workshops)Market Research Scheme

IP Assessment SchemeInvestment & Funding Scheme

International Mentoring SchemeOverseas Visit Support

Digital Marketing SchemeGrant Funding

New(New/Novice Exporters)

Extend your Global Reach

High Growth Market SupportMarket readiness & planningSales & Marketing StrategyCommercial development

Risk assessmentMarket visit preparation

Market entry supportIn-country commercial

assistance

New(Experienced Exporters)


Export for Growth/ERDF Summary

• Three+ year Project 2016-2019 focused on SMEs across 6 LEP areas in the South West

• Purposes to……

• Help more first time exporters

• Help existing exporters enter growth markets

• Create new jobs.

• New support programmes & possible (no Guarantee) Grant.


EligibilitySMEs in designated LEP areas - priority given to LEP selected sectors

• Export Essentials

• Propensity to export characteristics

• New or novice exporter

• Extend your Global Reach

• Experienced exporter with potential of £5m turnover+• Potential to compete in LatAm, India, China or SE Asia• Investment in market development £30k+


Support Delivery Timeline

Closed

Available

Ready for Export Workshop

Market Research

IP Advice Market Visit Advice

Digital Marketing

Enterprise Mentoring

Finance & Investment


Grant Funding

Ongoing Ongoing N/AOngoing Ongoing Jan2017

Jan2017

Ongoing Three WindowsIn 2017

International Trade Advisers providing tailored support throughout the project


• Focused on new to export SMEs• International Trade Adviser (up to 24 months)• Ready for Export - 1 day induction workshop• Up to 36 hours support from 3 of the 6 Schemes……

• Eligible to apply for grant up to £30K

Export Essentials

MentoringScheme

Market ResearchScheme

IntellectualPropertyScheme

DigitalMarketing

Scheme

InternationalMarket Visit

Scheme

Funding &Investment

Scheme

Export Essentials

Customised


Consultative support focused on growth markets

• Latin America, China, India and South East Asia• Overseas Market Specialists combined with outsourced in-

territory sales and marketing support • Up to 12 days consultancy


Extend your Global ReachOMIS

4

MarketReadiness

Assessment

Research & Planning

Sales & Marketing

Strategy

Preparation and risk

assessment

Market Entry Support


Ready for Export – One Day Workshop (Voluntary) Facilitated by professional trade advisers

Ready for Export

Workshop

Sessions that explore:• export success stories• clarifying and setting export goals• addressing fears about export and gaps in

knowledge• develop understanding of key areas for

business and personal development • key steps to take with an action plan

created on the dayFollowed through with a local International

Trade Adviser


1. Funding and Investment Advisory SchemeSpecialist support to help navigate the labyrinth of funding and investment sources through one of two options available

• Attend Funding and Investment clinics

• Full review of needs with specialist advice on best ways to access funding, finance and investment

Funding and Investment

Scheme


2. Digital Marketing Support SchemeOne-to-one specialist support to provide insight into the potential of digital marketing and show you ways to maximise its potential

• Gain deeper insight by joining a Digital Marketing master class or clinic

• Follow up with one-to-one on how to maximise Digital Marketing with access to a specialist

DigitalMarketing

Scheme


3. International Market Visit Advisory Scheme

International Market Visit

Scheme

• Advice and guidance for overseas trade shows, exhibitions and seminars

• Facilitate pre & post-visit support aligned to OMIS

• Coordinate overseas visit including liaison with

UKTI post in market, Embassy and OBN

• Facilitate pre and post-market visit briefings

• Assist with planning and travel arrangements


4. International Mentoring SchemeOne-to-one business mentoring for between 6-12 months

InternationalMentoring

Scheme

• Explore personal and professional situation• Develop strategies and goals for positive

impact on business development• Release and develop resourcefulness• Explore variety of options to consider

alternative actions in order to solve problems

Using SFEDI (Small Firms Enterprise Development Initiative) accredited mentors, the Government-recognised UK Standards Setting Body for Business Support


5. International Trade Research SchemeSpecialist support and face to face advice about market research, market selection and desk-based market research

• Full review of market research needs• Support on how to effectively use market

research to determine export strategy, plan research projects, source published reports and other sources of information

• Facilitate support for market research and advice on market entry and market development strategies

• Free desk-based market research and report for selected market

International Market

Research


6. Intellectual Property Protection SchemeSpecialist adviser to help SMEs navigate the complexities of IP

• One-to-one IPR clinics run locally (duration 1 hour) learning about IP and how to get the right protection for your company

• Face to face company visit from an IPR expert who can undertake a comprehensive review and audit of your current and future protection needs. A detailed report containing advice, recommendations and guidance on appropriate action to take

Intellectual Property

ProtectionScheme


Finance in DorsetMitchell Stuart

Founder & MD: Inferno Media

Social Media Wiz

20 Years Old

GCSE School Drop Out

“It’s hard to beat a person who never gives up.”

- Babe Ruth, Baseball Legend

Quick Facts - Inferno Media

HSBC / Barclays

Virgin StartUp

Virgin StartUp - Numbers

£20,000 fixed 6% over 5 years

Monthly payments of £390

Putting £5k away for the 1st year

Softwares

[email protected]


http://www.inferno.media/

Thank You!Mitchell Stuart

[email protected]


http://www.inferno.media/

Finance in the South West – wrap upSam Chapman, Partner


.

Summary

• Dorset is a great place to do business and has great businesses

• Dorset is full of entrepreneurial spirit (businesses and funding options)

• Funding and business support here…

• http://www.francisclark.co.uk/news-views/blog

• Thank you


Presentations

And more… (24 presentations in total, covering “full range” of funding and business support options)


Structure of morning

• Background, Equity, Debt and Business Support (8.30am to 10am)

• Dorset Chamber • Banks: an overview• Equity and Grants• Growth Hub

• Coffee Break (10am to 10.25am)

• Funding, Business Support, Investment Ready and SME perspective (10.25am to 12noon)

• Start Up (trading for < 2 years) • or Established Business

• Lunch and Networking (12noon to 1pm)

(c) copyright PKF Francis Clark, 2017

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