Lauren

1. Watch the cash!

Obviously, for a start-up, this goes well beyond spending money on technology, but it’s important to keep it in mind when choosing software.

Where possible, invest in systems that allow you to pay monthly with no tie-in. Even if you feel that your business requires something more bespoke and specific in the medium term, selecting Pay-As-You-Go systems initially can pay dividends. Initial use of a Pay-As-You-Go system will allow you to test your requirements and then purchase a more bespoke solution from a more informed position.

Consider things like dedicated or hosted servers, and shared environments, so that you are not spending money on in-house servers and so on. Rarely are these necessary nowadays, and in fact they can limit your flexibility. The online environments are usually available for a monthly fee as well, and this helps cash flow as well as limiting risk.

If your requirements change, or if the business fails, you are faced with a relatively small write-off as long as you haven’t signed up to long-term support contracts, or made large capital outlays in these early stages.

2. Do your research

Many business owners are not technology experts, and there is no reason why they should be, but there are many vendors who will take advantage of this fact, unfortunately. If you talk to someone who has a software package to sell, you will always find that their system will do everything that you ask of it – sometimes it is only later that you discover that those claims are at best costly, and at worst simply untrue.

This may seem a cynical view, and there are of course many technology vendors who will offer you the best advice and the benefit of their experience, but they will also tell you that there are no shortage of business like those above. The risk that you run, as a non-technical start-up, is that you don’t know which of these categories the people sitting in front of you fall into!

Make sure you research the market, talk to other businesses that you trust and find out what their systems are, or take external advice. When you settle on a solution, ask for reference sites that you can visit or speak to, in order to find out what the after-sales experience is.

3. Keep it flexible

You may well find that your business changes to some extent as it develops – you find some avenues are more worth pursuing than others, and sometimes what you end up doing a year or so in is not necessarily what you set out to do.

Having systems that are suitably flexible, or which can be dropped and changed quite quickly and easily, can keep you ahead of the game. If you have spent a lot of money on large and inflexible system, this can actively hold back your business growth

4. Aim for integration

It can be tempting to take on an assortment of systems to fulfil various functions that you either need, or think you need. Bear in mind that most of these systems will hold, for example, your customer contact details – perhaps in a CRM system and an accounting system.

If any of those details change, they will need to be updated in two places. Quite quickly, this process will fail, and you will find yourself in a position where you have two different addresses for someone, and you are not sure which is the correct one!

It’s not always easy, depending on the systems you need, but it’s worth aiming for the greatest degree of integration that you can manage.

The golden rule is to aim to store every piece of data only once, and then share it, if you can. So you have one core customer or contact record, one central product record and so on.

5. Consider your processes

When you start a business, you will probably have a fixed idea of how you want it to work. Be prepared to learn from the way that the systems you look at operate – by their nature they will be generic, as they are designed to fit the needs of as wide a base of potential users as possible.

In the early stages of your business growth, try and follow these generic processes, rather than being too prescriptive about your own idea of how you want to operate. You will find it much easier to get started, and you will still be able to get orders out of the door one way or another!

There is an adage that you shouldn’t let software control your business, and this is certainly true, but at the same time you should always be asking yourself why you need to do something that is different to the way in which many businesses operate. As often as not, you may find that there is no compelling reason, certainly in the early stages.

6. Plan ahead

Having made the above point about keeping your processes as generic as possible, it is still important to bear in mind where you want to get to in the end. If you are likely to have specific requirements, mobile apps or e-commerce for example, then try and ensure that the systems you are using can support some form of integration with external systems like these.

You won’t necessarily want to spend money on a mobile app at the start (unless that’s your business!) but you don’t want to be in a position where you are prevented from moving forward by a hasty and poorly researched decision made when you started.

In the end, choosing software is always a risk. You may find something better a few months later; you may spend too much because you are not familiar with the market; your business model may change; new technologies and possibilities may become available, and a host of other factors.

Keeping these six key pointers in mind while you are making your decisions may help to mitigate those risks. Like many purchase decisions, there is a balance to be struck, and there is no right and wrong.

We have extensive experience in implementing processes and systems to help you find the right focus for your business. If you’d like to find out more, please feel free to get in touch with me for a ‘no obligation’ chat about your business software and systems at david.hardstaff@hcbusinessadvisors.co.uk or on 07722 605545 .

As MDs think about the New Year or start planning for the next financial year there are a number of forthcoming employment law changes that may affect you and your business.

Gender Pay Gap

True this applies only to large employers (employing over 250 employees) but it is likely to be cascaded down to the SME sector in coming years. So why do something about this now? Gender pay gap reporting applies both to bonuses and pay. If there are discrepancies between male and female workers on either score when employees are doing the same job, there are likely to be fines, the cost of immediate remedial action and potential claims for back pay equalisation going back 7 years.

The reporting requirement for large employers will be to publish:

the difference in mean pay between male and female employees;
the difference in median pay between male and female employees;
the difference in mean bonus pay between male and female employees;
the difference in median bonus pay between male and female employees;
the proportions of male and female employees who were paid bonus pay; and
the proportions of male and female employees in each quartile of their pay distribution.

This should be a relatively quick job for the SME to see if there are any discrepancies and, in any event, is good practice to check that there is no unconscious bias creeping into pay decisions. Unless there is objective performance criteria to explain the difference, MDs might well consider putting in place a remedial action plan where appropriate. Given that SMEs are unlikely to be affected for several years, it gives MDs the opportunity to manage any discrepancies over a number of pay rounds.

Apprenticeship Levy

SMEs will be able to receive government funding towards the costs of apprenticeship training and assessment through co-investment, with the likely date of this new system of funding in England coming into effect from 1^st May.

The Government will pay 90% of the price agreed with the training provider, up to the maximum allowed by the funding band for the relevant apprenticeship standard or framework.

Employers with fewer than 50 employees will not be required to pay a contribution to the cost of the apprenticeship where the apprentice is aged 16 to 18 inclusive, or aged 19 to 24 inclusive if he or she has previously been in care or has a local authority education, health and care plan. The Government will pay 100% of the training and assessment costs in these circumstances.

Changes To Rules Employing Foreign Workers

From April 2017, an immigration skills charge will be introduced, so that SMEs that employ migrant workers under Tier 2 of the points-based system of immigration will be subject to a levy of £364 per certificate of sponsorship per year. The immigration skills charge will be in addition to current fees for visa applications.

In April 2017, the minimum salary threshold for “experienced workers” applying for a Tier 2 visa will increase to £30,000. New entrants to the job market, and some health and education staff will be exempted from the salary threshold until 2019.

National Minimum Wage

Cycles for national minimum wage increases – including the National Living Wage – will be aligned, with the next round of changes taking effect on 1 April 2017.

From 1 April 2017, the rates payable will be as follows:

For workers aged 25 or over, the rate will be £7.50 per hour (the National Living Wage).
For workers aged at least 21 but under 25, the rate will be £7.05 per hour.
For workers aged at least 18 but under 21, the rate will be £5.60 per hour.
For workers aged under 18 who are no longer of compulsory school age, with apprentices excepted, the rate will be £4.05 per hour.
For apprentices aged under 19 and apprentices aged 19 or over but in the first year of their apprenticeship, the rate will be £3.50 per hour.

Interns

Not a change but linked to the previous point about the national minimum wage, we often get asked about what an intern should be paid, if anything at all. Whether an intern qualifies for the national minimum wage depends on whether or not he or she satisfies the definition of a “worker”. Where, under an agreement with an organisation, the intern is obliged to work for it personally, the definition is likely to be satisfied and he or she will be entitled to the national minimum wage. However, if the intern is only observing or shadowing employees of the organisation, without undertaking any work him- or herself, he or she is unlikely to be a worker and will, therefore, not be entitled to the national minimum wage. If the latter applies we would recommend that you consider paying travel expenses and subsistence as a gesture of goodwill and a way of promoting your company for the future.

There are quite a range of employment law changes coming up this year. If any of these may affect you, then give us a call for a confidential discussion to talk these changes through. I can be contacted via stephen.cowburn@hcbusinessadvisors.co.uk or by phone on 07974 425361.

Navigation

6 Important Technological Considerations For A Start-Up

1. Watch the cash!

2. Do your research

3. Keep it flexible

4. Aim for integration

5. Consider your processes

6. Plan ahead

Impending Employment Law Changes for 2017

Gender Pay Gap

Apprenticeship Levy

Changes To Rules Employing Foreign Workers

Interns