I know this sounds patronising. After all, who knows your
business better than you?
I can assure you it isn’t meant to be. The point I’m making
is that, as well as giving an overview of your business, you have to be able to
articulate things like the main idea behind it, your mission and objectives,
and who your main competitors are.
Think about what the market is like, and where it is going
So, what’s the current condition of the market?
Is it growing, fairly stable, or declining?
Are there any notable underlying trends?
What is the demand in the market, and how do your products
or services meet that demand?
What’s your Unique Selling Proposition, and are there any
gaps in the market which you intend to fill?
Know the audience you are selling to
Which segment of the market have you designed your products
and services for?
Women, or men, or both?
Working women, or stay-at-home mothers?
People within a certain age range?
Are they based in cities, suburban or rural areas?
Are they early adopters or technophobes?
What are their problems, and which of these will you solve
with your products and services?
These are some of the questions which will frame your
offering. And they are crucial, because sometimes it’s easy to forget that our products
and services are NOT for us.
They must meet the needs of your target market. Give the people
what they want, as they say!
Brainstorm some ideas about how you will price, market and sell your
products and services
Take some time to think about your pricing strategy.
Most of the time, people think this involves plucking a
price out of the air, but there’s more to it than that!
How much does each unit cost to produce, and what margin
will the market tolerate on top of that?
How does that then match your expectations for income and
profit?
Then, you need to think about how you want to market and
sell products and services. Social media makes advertising and marketing more
accessible, but bear in mind that what works for a similar business may not
work for yours.
So, do a bit of research, and have some intentions for how
you will conduct your sales and marketing campaigns.
How will you measure your success?
“Measure your success” sounds boring, I know!
But if you don’t work out in advance how you’ll do this, how
will you know what you’re working towards?
And more importantly, how will you know when it happens?
Take some time to think through the finances
This part is easy to skip, but is probably the most important
of all.
You need a certain amount of cash to run your business every
month. Sum up your expenses (and don’t forget to include your salary).
What does the total come to?
That’s what the amount you need to have available. Not invoiced
and waiting to be paid; actual cash in the bank. Anything less, and you
immediately have a cash flow problem.
Many a business has been successful on paper and in terms of
invoiced amounts, but ended up filing for bankruptcy because it simply couldn’t
meet its obligations when they were due.
Another key point to address is the length of time you think
it will take to make a profit.
It’s not unusual for some businesses not to make a profit
for some months, or even years. As long as you know that upfront and are
prepared for it, that’s fine!
But if that’s the case, do you have an idea of what the losses
will come to each month? How will this be funded, and how long can you sustain
that?
In my experience, people either don’t plan for these
scenarios, or are far too optimistic with their figures.
P.S. Where I’ve recommended doing research, please don’t think
it has to be onerous.
Ask your family and friends. Use the internet. Create a poll
using Surveymonkey or Google Polls. Some professional bodies – such as the Institute
of Directors – offer research sessions which you can access as part of their
membership. Check with your professional body and see if they can help you do
some, maybe they’ve even done something similar already and have some
statistics they can share with you!
The deadline to submit your self-assessment tax return is 31
January. With just over two weeks to go, it’s a good time to go over the 5
steps you need to follow to complete your self-assessment tax return.
The purpose of the return is to tell Her Majesty’s Revenue
and Customs (HMRC) how much you earned in the last tax year and based on the
information you provide, the appropriate income tax you need to pay is
calculated.
If you are self-employed – so you don’t earn a salary from
which your tax is automatically deducted – or have more than one source of
income, this applies to you!
You can either do the return yourself, or hire an accountant
to do it for you (check out the ICAEW or ACCA websites to find an accredited
professional near you).
If you do decide to do it yourself, there are 5 steps I
suggest you follow. Before I tell you what those are, there are a few things
you need to know:
·
Tax years in the UK run from 6 April to 5 April,
e.g. from 6 April 2016 to 5 April 2017.
·
The deadline to submit your return and pay the
tax due is 31 January after the end of the tax year*. Using the example above,
the deadline is 31 January 2018.
·
Act NOW if you haven’t already, because late
payments attracts a penalty! If you suffered from a serious illness, family
bereavement or a natural disaster you’ll be given a pass, but forgetting or
being away on holiday do not count as reasonable excuses. So don’t put this off
any longer!
Check to see if you qualify
You have to complete and submit a tax return if you were
self-employed in the last tax year, or earned more than £2,500 in untaxed
income.
For example, for landlords with rental properties, or people
who rent out rooms in their homes, if the income after expenses is more than
£2,500, a tax return must be submitted.
Some of the other criteria to consider are earned interest
or dividends more than £10,000.
There’s a full list of these criteria here https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return,
and there’s also an online tool where you can confirm if you need to do this https://www.gov.uk/check-if-you-need-a-tax-return
Register with HMRC
If you haven’t filled in a self-assessment tax return
before, you’ll need to register with HMRC before beginning the process of
filling in the return.
You can do that here https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed
HMRC will send you a Unique Taxpayer Reference – or UTR –
which you’ll need when completing the return online.
Collate all the information you’ll need
Before you start filling in the return, I’d recommend you
get all your records and information ready.
You’ll be asked to provide details for a whole raft of
things which I’ve listed below:
·
The total of what you earned in the year. That
includes income from your business and any employment.
·
Any income earned from dividends.
·
Any income earned from rent.
·
Any income earned from business interests you
may have outside the UK.
·
Any interest earned on your savings.
·
Any interest you paid on borrowings.
·
Any contributions you made to a pension.
·
Any benefits you received, such as state
pension, Child Benefit or unemployment benefit.
·
Any perks you received, such as private
healthcare or a car allowance.
·
Any income earned from the sale of property or
shares.
·
The sum of any valid business expenses.
Complete the return online
Now, you need to fill in all this information online.
Log into the HMRC system here, and input the relevant
information when prompted https://www.gov.uk/log-in-file-self-assessment-tax-return/sign-in/prove-identity
You can fill sections in, save, and come back at a later
time to complete it, if you need to.
Organise your records
Haven’t been that prepared this year? You can always start
now to organise your records, so next year’s return isn’t so tedious! These are
some of the documents I’d recommend you start filing.
·
Invoices
·
Payslips
·
Receipts
·
Bank statements
·
Pension statements
·
Benefit documentation
·
P11D expenses and benefits form.
HMRC requires that you keep records for up to 5 years after
the deadline.
So even though you’ve completed this year’s return, it’s
never too early to get your digital or physical filing in place for next year.
I do both for a catch-all approach – you can never be too careful with the
taxman!
There is a range of online accounting software you can use
to keep track of all these items, and you can also file away hard copies.
And if you get stuck?
HMRC has lots of resources online https://www.gov.uk/topic/personal-tax/self-assessment
which you can look through.
And remember, you can appoint a qualified accountant to do
this for you.
*The 31 January deadline applies if you do your returns
online. You can go old school with your returns if you prefer, but the deadline
for paper returns is 3 months earlier in the October.
The second Payment Services Directive – also known as PSD2 –
becomes UK law on 13 january 2018.
From the name, it’s easy to think it only affects banks.
But hold on! It has implications for you too.
Here’s a summary of what it’s about, and the main ways it
will affect you.
So, what’s PSD2?
The first Payment
Services Directive (PSD) from 2009 put in place a legal framework for payments
and related services across Europe.
It covered the rights and responsibilities of consumers,
users and providers of payment services, and ensured that European countries
implemented, and were held to, a uniform set of standards.
PSD2 builds on the success of PSD, and at its core wants to increase
competition in the industry while reducing the dominance of banks.
Big banks have traditionally held all the aces when it comes
to the business of payments, and when you consider the amount of information
they hold on their customers – data is big business, just ask Facebook! – there’s
been little incentive for them to innovate what they have on offer. Save for a
few companies such as PayPal, Apple and Stripe, few have been able to make even
the tiniest dent in the banks’ market share.
Why is this a problem, you ask? It means that you as a
consumer don’t have much of a choice. When you look at the UK, there are 4 big
banks, with VISA and MasterCard being the two dominant payment card schemes. So
where do you go for a truly different sort of service?
Why was PSD2 introduced?
PSD2 is set to become law in the European Economic Area
(comprising the 28 EU member states, as well as Norway, Iceland and
Liechtenstein) on 13 January 2018, and here are some of the reasons the wheels were
set in motion:
1.
To encourage new players, especially those that
are NOT banks, to get into the business of payments.
2.
To encourage the introduction of new,
cutting-edge technology which will revolutionise the way payments happen in
Europe.
3.
As a result of increased competition and
technology, the expectation is that the cost of payments will fall. A bonus for
consumers!
4.
To improve security around payment processes,
and the way consumer data is handled.
Who is responsible for
PSD2?
PSD2 is a directive issued by the European Commission, which
becomes national law on 13 January.
How does PSD2 affect you?
You already have many rights when it comes to protection
against misuse of your data, and any potential fraud.
PSD2 takes these even further, by mandating that banks and
businesses that process payments use what is referred to as strong customer
authentication (SCA) for payments.
This means they have to take significant steps to make sure
any payment you make is actually coming from – and authorised by – you.
So if you find you’re asked to verify your identity or
payment in a different way, don’t be alarmed. It’s all PSD2-related.
Talking about your data though, in a bid to promote
competition and open it up to new organisations, banks could potentially share
what they know about you with these new players to the market, who will fall
into 2 categories:
Payment Initiation Service Providers, and Account
Information Service Providers.
Agreeing to use these services could make your online
payments simpler and more seamless, and you’ll be better placed to compare
what’s available in the marketplace. It also means you could make a payment
directly from your bank account without using a debit or credit card, which
could save you any card charges and fees.
Don’t worry, your data won’t be shared without your
permission! Banks – who as well as being dominant forces in the landscape, are
also the largest repositories of consumer data – are required by PSD2 to share
this data when you give your permission, as a way of levelling the playing
field.
In preparation for PSD2, your bank will have sent the last
few years developing technical integrations to make the data sharing process
easier. There’s a whole initiative around this within UK banking called Open
Banking, and your bank will have already sent you something that looks like
this:
PSD2 is also meant to end a practice that’s been a pain for
consumers for a long time.
You know when you go into a shop, or book theatre tickets
online, and you’re charged an additional percentage for using your credit card?
That practice – known as surcharging – ends with PSD2.
That’s not to say that shops and retailers will take this
lying down; it’s hard to know how they will respond. They might swallow the
costs, put their prices up across the board (which would affect ALL buyers, not
just those using cards), or offer shoppers an incentive to use different ways
to pay.
The jury is still out on this one, so keep your eyes peeled
to see what happen when you shop after 13 January!
How does PSD2 affect your business?
PSD2 only affects payment institutions, credit institutions,
and electronic money institutions.
If this is not your core business, there is no impact.
The only thing to note is that, if you add a surcharge for credit
cards when collecting payments, this practice will no longer be allowed.
Will Brexit affect PSD2?
The UK government has confirmed that PSD2 implementation
will not be affected by the process of leaving the European Union.
Since that only takes effect in 2019, PSD2 will be fully
implemented and transposed into UK law.
One of the main things I dislike about EU legislation – and the new General Data Protection Regulation is no exception – is the way it is written.
Documents are lengthy, and the language is technical, vague and unwieldly.
Even lawyers complain that interpreting it is a herculean task, and this is even when one has the resources to hire teams dedicated to doing this and not much else!
Determining what the regulations ACTUALLY say is left to the general populace, and a consequence is that an entire industry has emerged around the GDPR.
Much has been written on the subject; some of which makes sense.
And the rest? Not so much.
While I’m aware of the irony of contributing yet another article to the Data Protection universe, I wanted to dispel these 7 myths about the GDPR:
My business is small, GDPR doesn’t apply to me
This myth is quite common among small businesses, the misconception being that their company size or number of employees have any kind of bearing on whether this is relevant.
The qualifying criteria have nothing to do with whether you are a solopreneur, or have just one employee. A couple of questions you have to ask yourself are:
- Do you collect or use data that can be used to identify an individual? Bear in mind that this data could relate to an employee, freelancer or contractor, supplier, or client. In case you’re wondering what kind of data could identify an individual, think email addresses, names, dates of birth, and even a computer’s IP address.
- Do you work with data that can be considered sensitive? So, information on racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, health or sex life. Genetic and biometric data also counts as sensitive (or special category, to use the correct GDPR term).
If the answer to (either or both) of these questions is “Yes”, then the GDPR applies to you. To be fair, there aren’t many businesses it wouldn’t apply to!
The supervisory authority in the UK – the Information Commissioner’s Office – has a simple assessment tool you can use to check if the new law applies to your business.
The authorities will never come after me
I routinely hear people say, “The regulator won’t come after us; we’re too small. They just don’t have the resources to police this; they’ll go after the big boys first.”
By all means take a risk-based decision on whether this is something to comply with in your business. But while the comment about resources may have some truth in it, it’s important to understand that getting on the regulator’s radar isn’t just a function of how big your company is.
If several of your clients complain to the ICO about data misuse or other non-compliance, that will certainly get you noticed, regardless of whether you’re a multinational or a freelancer from a co-working space.
Processing personal data without consent, or not acting on a request relating to the individual rights are examples of scenarios where your customers could complain to the ICO, so it’s important to get familiar with what constitutes personal data, what personal data you hold, why you need to hold it, how you store it, what the individual rights are, and how you would respond to customer requests.
My business is not based in the EU, so it doesn’t concern me
One of the aspects of the GDPR is its extraterritorial reach.
Which means it’s not restricted to businesses which operate within the EU!
As well as all businesses in the EU, it applies to any businesses that serve or monitor customers resident in the EU, regardless of where those businesses are headquartered or located in the world.
So, companies like Facebook, Amazon, Google, Facebook, Salesforce and InfusionSoft are bound by the GDPR and have to comply with it, since thery serve and hold data on EU customers.
Now, how the EU will enforce the GDPR in cases of non-compliance on international companies is a different story; one for another day perhaps…
As long as I present subscribers to my email list with a double opt-in, I’ll be compliant
GDPR has been every marketer’s nightmare.
Their databases have taken months and years to build and are considered the lifeblood of their businesses, as it means they have a list of contacts who are “warm” (i.e. they are familiar with the product or service they provide and have at some point expressed an interest in it), who they can keep informed by way of regular updates, and can sell to when new things are added to the product range.
The issue is that most (if not all) of those contact details cannot be proved to have been sourced in ways that are considered GDPR-compliant, and so businesses are having to seek the consent of whose details they hold.
I’m sure your inbox has been flooded by similar requests; I’ve had emails from companies I haven’t even heard of, asking if I want to continue hearing from them!
The key to this is that customers have to actively opt in. this means they can be no pre-ticked boxes, and the onus cannot be on the customer to opt out.
The problem this present for marketers is that many people are choosing NOT to opt back in to many databases; anecdotal evidence suggests that less than 20% of contacts on their databases are doing so!
The point is that some contacts previously got on databases and distribution lists by means of a double opt-in, which is where you might input your email address to get access to a free gift (such as a checklist, pdf, white paper, etc.) – this is the first opt-in.
The business offering the gift emails you asking you to confirm that you really want the gift – this is the second opt-in.
However with the GDPR, opting in to a distribution list must be explicit and not linked to any other communication or offer, which means the double opt-in as it was previously used in conjunction with free gifts and offers, no longer suffices.
Individuals must clearly understand that they are agreeing to be on your distribution list, and you must be able to evidence that, if it is ever required.
I use other software and systems, but it’s up to THEM to be GDPR compliant
It is, but since they are working on your behalf, you have the overall responsibility to ensure they are compliant before they process any data on your behalf.
I’ll give you an example. Say I use Office 365 software on my laptop, and as part of my client work, I process their data via Outlook, Excel and PowerPoint, which are all Office 365 applications.
The onus is on me to ensure that Microsoft is adhering to the GDPR.
The way to do this is to ask your software supplier what they have done to achieve compliance, or ask them for a Data Processing Addendum to your existing contract (in this scenario, they are acting as a Data Processor on your behalf, and you are the Data Controller. I’ve explained what these terms mean here .
You will find that larger companies like Microsoft have a standard one which they will have sent out to users of their software – or it will be on their website.
If you do not get a satisfactory response from a vendor or supplier, and are not convinced of their approach to GDPR, you may want to consider the merits of continuing to give them your custom, as their non-compliance could compromise your business.
Since my business is based in the UK, Brexit means I don’t have to comply with GDPR
Even though the United Kingdom is due to exit the European Union in 2019, the government has confirmed that the GDPR will still apply.
The ICO is the UK’s supervisory authority, and has been advertising the incoming regulation for the past few months.
So sorry folks, this is one you still need to comply with, regardless of Brexit!
Once I comply by 25 May 2018, my job in terms of data protection is done!
The enforcement deadline is 25 May 2018, but that doesn’t mean your responsibility for data protection ends there. Compliance is something you’ll need continue to execute and monitor, so unfortunately, this isn’t something that’s a one-off.
Your databases, records, processes must be living documents, and training will need to continue to ensure that standards are maintained.
*Please note that this does not constitute advice on the legalities of GDPR or data protection. This blog post is for the purposes of awareness and information only; you remain responsible for getting independent advice and ensuring your business complies with the regulation.
