StartUp Games to attract foreign start-ups to Tech City

Olympics initiative will promote talent and diversity in UK start-up scene
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Published on 12 January 2012

The government is to invite 300 international start-ups to Tech City at the same time as the Paralympic Games, to take part in a new ‘StartUp Games’ initiative.

The event – which will be organised by the government’s trade and investment promotion industry, UKTI, in cooperation with the Olympic Park Legacy Company – will see foreign start-ups compete to be recognised among the world’s highest potential start-ups.

The scheme ties in with plans to populate the area of East London known as ‘Silicon Roundabout’ with technology start-ups, to make the district a world-force in tech innovation.

It is hoped that some of the shortlisted businesses will consider relocating to the area, after experiencing the Olympics buzz in nearby Stratford.

Rajeeb Dey, co-founder of StartUp Britain which will also be involved in the initiative, believes the scheme will also benefit UK start-ups. Speaking exclusively to Startups, he said:

“The StartUp Games will provide an exciting opportunity for start-ups to benefit from the increased exposure the Olympics will bring to the area surrounding Tech City – and will showcase what Britain, and in particular East London, has to offer tech start-ups.”

Dey, who is also CEO of Enternships.com, a tech start-up which connects interns to entrepreneurs, added:

“As an entrepreneur based within Tech City myself, I have seen the benefits of having a diverse workforce (our team includes people from the US, Romania and India).

“Diversity of talent – both of the entrepreneurs leading start-ups and those looking to work within start-ups, in Tech City, is a tremendous asset for the area and the StartUp Games will be a great platform to celebrate this.”

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

Tenner Tycoon suspended after failing to find new backer

Peter Jones slams “losers” who hinder enterprise education
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Published on 12 January 2012

Tenner Tycoon, the flagship scheme for stimulating young entrepreneurship in the UK, has been suspended – prompting an angry reaction from Dragons’ Den star Peter Jones.

The initiative, which launched in 2007 as Make Your Mark with a Tenner, gave school pupils a £10 note and challenged them to build a business.

However, when the government withdrew funds from Enterprise UK – the quango behind the scheme – last year, the initiative was left without a home.

Although potential partners have now been found, coordinating the process of handing over Tenner Tycoon has caused a delay which will prevent the 2012 programme launching in March.

Speaking exclusively to Startups, Oli Barrett, co-founder of Tenner Tycoon, said: “The trustees of Enterprise UK have been through a thorough process which, in the end, was just not fast enough to enable the scheme to proceed on time.”

Jones has invested £200,000 in the initiative over the last two years, with the scheme adopting the name ‘Tycoon’ to reflect his involvement.

However, it appears the celebrity entrepreneur was disappointed by the delays. Barrett told our reporter:

“My understanding is that he (Jones) became frustrated by the process conducted by the trustees and ultimately decided that he wanted to go his own way.

“It’s a shame that such a simple idea has been bogged down when it should be unleashed and allowed to fly.”

Jones released a string of heated tweets alluding to the topic on Twitter this morning. In one, he said:

“Note to self: ‘continue to battle against bureaucrats who hinder entrepreneurial learning in our schools. They’re losers. The kids must win.'”

In another he wrote: “I might start naming & shaming those who hinder my campaign of encouraging enterprise in schools if I don’t get what I want” – adding the tag ‘ #wontbestopped’.

Barrett added: “Peter is one of those people who, as soon as he heard about Tenner, just ‘got it’ and loved it.

“He has been an incredible supporter over the years and I know will continue to champion everything that the scheme is about.”

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

UK entrepreneurs plan overseas expansion in 2012

One in three targeting international market, with focus on western Europe
Written by
Published on 12 January 2012

Nearly a third of UK entrepreneurs are planning to expand their businesses overseas in the New Year, research has revealed.

According to RSM Tenon, 31% of Britain’s entrepreneurs have the international market in their sights for 2012 – with nearly half looking to western Europe as their best opportunity for international growth, in spite of the Eurozone crisis.

Next on the hit list is eastern Europe, which will be pursued by 37% of the study’s respondents – while 35% will seek new customers in north America.

The research – which featured contributions from leading UK entrepreneurs including Will King, founder of King of Shaves, and angel investor Sherry Coutu – also found that the highest proportion of internationally-minded entrepreneurs are based in London (68%), closely followed by Midlands-based businesses.

However, on top of ambitious overseas expansion plans, 15% of the entrepreneurs studied said that they are looking to acquire additional businesses in international markets within the next 12 months.

One in three entrepreneurs said that increased international opportunities would play a key role in the overall improvement of entrepreneurship in the UK.

Philip Coleman, head of international business development RSM Tenon, said: “It is interesting that despite the current crisis in the Eurozone, most of the entrepreneurs see their businesses expanding into Europe over the next year.

“Despite the current difficulties, I think that there are really interesting opportunities for UK companies in Europe.

“My advice is to look beyond the crisis, be prepared to go in and stay in for the long-term, and if it is done in the right way there could be some good rewards for UK entrepreneurs post the issues in the Eurozone.”

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

How to submit your Self Assessment tax return to HMRC

Filing a self-assessment tax return can be stressful. Our guide is here to help you through the process and to get it right the first time.
Written by
Published on 12 January 2012

Whether you’re a sole trader, small business owner, or freelancer, you probably dread your Self Assessment tax return. And while the process can be much easier with good accounting software, the deadlines throughout 2025 and into 2026 are impossible to ignore. 

But if you’re new to Self Assessment tax returns, you’re probably feeling a lot of pressure to get it right, especially with Making Tax Digital (MTD) becoming mandatory from April 2026.

To help you out, this guide will break down everything you need to know — including what a Self Assessment tax return is, how to submit one step by step, and the most common pitfalls to watch out for on the way.

  • Self Assessment is for anyone earning untaxed income, including sole traders, landlords, and company directors.
  • You must register by 5 October, following the end of the tax year you earned income.
  • MTD is coming — Making Tax Digital rules will apply to more sole traders from 2026, with income thresholds phasing in.
  • Accounting software makes the process easier — helping track income and expenses, calculate tax, and even file your return.
  • Only claim expenses that are ‘wholly and exclusively’ for business use, and be ready to show proof.

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What is a Self Assessment tax return?

Put simply, a Self Assessment tax return is how individuals in the UK report their income to HMRC when it’s not automatically taxed, like it would be through Pay As You Earn (PAYE) for most employees.

Through the tax return, you’ll need to report your income and then HMRC will calculate how much tax — and sometimes National Insurance Contributions (NICs) — you owe. You can also claim any allowable expenses or reliefs to help reduce your overall tax bill.

Making Tax Digital

Making Tax Digital (MTD) is changing the way businesses and self-employed individuals handle their taxes. Here’s a quick breakdown of what these rules mean for both business structures:

  • Since April 2022, VAT-registered companies must keep digital value-added tax (VAT) records and use MTD-compatible software to submit VAT returns.
  • Sole traders earning over £50,000 annually must switch to MTD for income tax by April 2026. Those earning over £30,000 annually will need to make the switch by April 2027, and those earning over £20,000 by April 2028.
  • Sole traders must also file their Self Assessment tax returns quarterly (every three months) through MTD software, instead of annually. They must also file a final declaration after the tax year ends.

HMRC also planned to introduce MTD for corporation tax, but announced in July 2025 that those plans had been scrapped.

For more information, make sure to read our guide to complying with Making Tax Digital.

Who has to file a tax return?

In the UK, you must file a tax return if any of the following apply to you:

  • You’re self-employed or a sole trader: if you run your own business or work as a freelancer.
  • You’re a company director: even if you don’t take a salary, you must still file a return as a director of a limited company.
  • You earn income from property: if you receive rental income as a landlord/landlady.
  • You earn over a certain amount: if your income is above the personal allowance threshold (currently £12,570) and hasn’t already been deducted, you’ll need to file a tax return.

You can find the full list on the government’s Self Assessment tax return page.

Another common question among small business owners is “How much can I make before I have to file a tax return?”

Luckily, the answer to this one is simple — £1,000. That means as soon as your revenue (the amount your business has earned in a tax year) surpasses this amount, you’ll need to submit a Self Assessment tax return.

Key deadlines for the 2024-25 and 2025-26 tax years

Make note of these important upcoming deadlines:

  • 31 October 2025: deadline by which HMRC needs to have received your paper tax return for the 2024-25 tax year
  • 30 December 2025: deadline to file your online tax return if you want HMRC to collect your tax through PAYE (only if you owe under £3,000)
  • 31 January 2026: deadline to submit your online tax return and pay your 2024-25 tax bill
  • 31 July 2026: if you make payments towards your bill, this is the deadline for your final payment on account (POA) for the 2024-25 tax year
  • 5 October 2026: deadline to register for Self Assessment
  • 31 October 2026: deadline by which HMRC needs to have received your a paper tax return for the 2025-26 tax year
  • 30 December 2026: deadline to file your online tax return if you want HMRC to collect your tax through PAYE (only if you owe under £3,000)
  • 31 January 2027: deadline to submit your online tax return and pay your 2025-26 tax bill
  • 31 July 2027: if you make payments towards your bill, this is the deadline for your final payment on account (POA) for the 2025-26 tax year

Missing these deadlines can result in penalties, so it’s important to make note of these dates and give yourself enough time to prepare and submit everything correctly.

What you need before you start

Before starting your Self Assessment tax return, it’s a good idea to get all your documents and details in order. Having everything ready ahead of time will help make the process smoother and avoid costly mistakes.

Here’s what you’ll need to have ready before you begin:

  • Your Unique Taxpayer Reference (UTR): a 10-digit number HMRC gives you when you register for Self Assessment. This can be found in letters from HMRC or on your online account.
  • Government Gateway login: gives you access to your personal tax account. If you haven’t already, you’ll need to create an account on the government website.
  • Your National Insurance number: HMRC will use this to track your NI contributions.
  • Income records: you’ll need documentation for self-employment income (invoices, bank statements, etc.), employment income (P60 or P45), rental income, dividends or interest from savings and/or investments, or any other untaxed income.
  • Expenses records (if self-employed): proof of allowable expenses, such as travel, office costs, or software subscriptions.
  • Details of tax reliefs or allowances: this includes pension contributions, charitable donations, or things like Seed Enterprise Investment Scheme (SEIS) or Enterprise Investment Scheme (EIS) investments.

How to file a Self Assessment tax return

Filing your first Self Assessment tax return might feel daunting at first, but it gets easier once you know what to expect. Here’s a step-by-step rundown of everything you need to do —  from first registration to paying your bill.

1. Register for Self Assessment

The very first step is to register with HMRC. Remember, you’ll need to do this by 5 October following the end of the tax year in which you earned income. Once registered, you’ll receive your unique taxpayer reference (UTR).

2. Log in to your HMRC account

For this, you’ll need to go to the HMRC login page and sign in using your Government Gateway ID. From there, you’ll be able to access your personal tax account and the Self Assessment section.

3. Fill in your income and expenses

Next, you’ll need to enter details of your self-employment income and allowable expenses. If you’re using accounting software, you may be able to import this data directly.

Make sure to include all relevant income for the tax year, and only claim expenses that are exclusively for business use, such as travel, office equipment, and professional services.

You should also ensure everything is accurate. HMRC may ask for evidence, and incorrect claims could lead to penalties. Therefore, you should keep digital records throughout the year to make this process easier.

4. Add any additional income (if applicable)

If you have income from other sources besides self-employment, you’ll need to include it too. This includes:

  • Employment income (if you had a job alongside self-employment)
  • Rental income
  • Dividends and/or interest from savings or investments
  • Foreign income

5. Review and submit

Before hitting that submit button, you should double-check everything first — especially your income, expenses, and tax reliefs. Once you’re confident that all the details are accurate, you can submit your return.

6. Pay your tax bill

Once submitted, HMRC will tell you how much you owe. You’ll need to pay this by 31 January.

You will also need to make a second “payment on account” by 31 July, which is a payment made towards your next tax bill. However, you’ll be exempt from POA if your last Self Assessment tax bill was less than £1,000.

There are several ways you can pay your tax bill, including:

  • Your online bank account
  • Online or telephone banking (Faster Payments)
  • Clearing House Automated Payment System (CHAPS)
  • Debit or corporate credit card online
  • Your local bank or building society (you will need a paying-in slip from HMRC to do this)

You can find more information on paying your tax bill on the government website.

How to claim expenses

Claiming the right expenses is absolutely vital. Otherwise, you’ll end up paying more tax than you have to. But how do you know what counts as allowable and what doesn’t?

Luckily, HMRC have made things a little easier by listing the kind of expenses you can claim back. These include:

  • Office costs: stationery, rent, computer software, utility bills, etc.
  • Travel expenses: fuel, vehicle insurance, parking, breakdown cover, etc.
  • Clothing expenses: uniforms, protective clothing, and costumes for actors and entertainers.
  • Staff expenses: employee salaries, bonuses, workplace pensions, staff benefits, etc.
  • Reselling goods: goods for resale (stock), raw materials, and direct costs from producing goods.
  • Legal and financial costs: when you need to hire an accountant, solicitor, surveyor, or architect for business reasons.

So, how do you actually claim back on these expenses?

It’s simple — all you have to do is include them in your Self Assessment tax return under the self-employment section. When filling it out, you’ll either need to enter your total allowable expenses as a lump sum or break them down into categories.

Just make sure you only claim business-related expenses, keep records of your costs, and be prepared to provide proof if HMRC asks to see it during a review or audit.

For any expense that’s split between business and personal use (for example, the running costs of a car you use for business-related meetings and picking up groceries), you’ll need to work out what share of the use is for business, and then claim for that. If it’s 50/50, for example, you can claim half of those costs as a business expense.

Common mistakes to avoid

The last thing you want to do is make any errors on your tax return, as this could result in unwanted penalties. So to help you avoid the unnecessary costs and stress, here are some common mistakes to steer clear of.

❌ Missing the deadline: late submissions will result in penalties, even if you don’t owe any tax. Make sure you set reminders well in advance and aim to file as early as possible.

❌ Not registering in time: you must register for Self Assessment by 5 October. Miss it, and you could face more fines. Therefore, you should register as soon as you know you need to file.

❌ Forgetting other income sources: only including your self-employment income? You could be underreporting. To avoid this, record all income streams throughout the year and cross-check them before submitting.

❌ Claiming unallowable expenses: only claim for wholly and exclusively business-related costs. Claiming personal expenses will only cause problems, so make sure you separate these from your business expenses.

❌ Not keeping records: you need to keep receipts, invoices and bank statements for at least five years after the filing deadline. Use accounting software or a simple spreadsheet to track income and expenses as you go.

What happens after you submit?

Once you’ve submitted your tax return, you’ll receive confirmation from HMRC. From there, HMRC will review your submission and calculate how much tax you owe.

After this, you’ll receive a tax calculation showing how much you owe and how much you may be due to receive as a refund. This will be available in your online HMRC account, and you’ll also get a statement of this calculation.

It’s at this stage where you’ll need to pay the tax you owe. Remember that you can refer to the government’s page on paying your Self Assessment tax bill for different payment options.

If you’re having trouble

If you’re facing problems with paying your tax bill, make sure you contact HMRC as soon as possible. The helpfully titled “If you cannot pay your tax bill on time” page explains how to do so. 

Individual cases vary, but if your tax bill is less than £30,000, you may be allowed to set up a payment plan and pay in monthly instalments.

It’s also important to note that HMRC might contact you for more information. In this case, you should keep hold of your records to provide proof of expenses or income.

Need help?

Whether you’re working with an accountant or going it alone, accounting software will make running your business a whole lot easier.

The days of entering figures into spreadsheets are long gone. The beauty of accounting software is that it can help you track income and expenses in real-time, automatically calculate tax, send reminders for deadlines, and even submit your return directly to HMRC.

Check out our article on the best accounting software for small businesses for our personal recommendations.

Conclusion

No one enjoys the Self Assessment process, and that’s never going to change. It’s a tedious process of box-ticking that culminates in you having to pay the government some of your profits.

However, keeping records and planning ahead can make it a lot less stressful. The key is staying organised throughout the year so that filling out the dreaded form is merely a minor task. Plus, using accounting software and seeking professional help can simplify the process even further.

Just remember that the more you plan ahead and stay on top of your finances, the smoother tax time will be. And if you’re ever in doubt, don’t hesitate to reach out to HMRC or a professional accountant for help. Taking these steps will help make your Self Assessment experience as stress-free as possible.

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Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

Start-ups seek alternative finance in 2012

UK entrepreneurs believe they can no longer rely on the banks
Written by
Published on 12 January 2012

Nearly two thirds of entrepreneurs (65%) are planning to seek alternative forms of finance in 2012, after losing confidence in the banks funding their businesses.

That is according to research by daily deals site Huddlebuy.co.uk, which spoke to 1,000 small business owners in the UK.

The results are in contrast to the initiatives announced by the government this year, such as Project Merlin, which claimed to boost bank lending to small businesses.

The research also revealed distinct disillusionment among young entrepreneurs – with almost three quarters of 18-34 year old start-up owners saying they saw no option but to seek alternative funding channels in 2012.

Craig Hamer, joint managing director of Dews Motor Group, said: “The banks are now the last place many businesses think about for investment and funding.

“They’re not lending like they used to, and the situation’s only going to get worse in the coming months.”

Saurav Chopra, CEO of Huddlebuy.co.uk, added: “Bank lending for UK small businesses has gone from bad to worse. The coalition government and banks talk a good game but talk is all it is.

“The reality is that businesses know they can no longer rely on banks. But at least entrepreneurs [like Crowdcube, Funding Circle and MarketInvoice] are fighting back to help fellow businesses find the finance they need.”

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

Rohan unveils 20 new franchise opportunities

Long-established apparel brand targets locations across the UK
Written by
Published on 12 January 2012

The outdoor clothing retailer Rohan has unveiled 20 UK franchise opportunities – from Fort William to the Isle of Wight.

The company, which was established in 1972 by husband and wife team, Paul and Sarah Howcroft, opened its first franchise in 1985 and is now seeking expansion with a number of new retail outlets.

The locations targeted include Amersham, Lincoln, Lewes, Dorchester, Marlborough, Reigate, Sudbury, Lymington and Windsor.

Franchisors are also wanted to operate outlets in Ludlow, Brighton, Market Harborough, Newbury and Tavistock, as well as Betws Y Coed, Monmouth, Hungerford and St Albans.

The initial franchise investment for each outlet is £19,750 (plus VAT) and the total investment required by new franchisors is expected to be approximately £75,000 (plus VAT). However, a key asset of the franchise model is that none of this capital is tied up in stock.

Open days for potential franchisers are currently being held at Rohan’s head office in Milton Keynes every Wednesday, where new outlet owners will receive two weeks’ initial training.

For more information or to express interest in becoming a Rohan franchisor, visit the Rohan website.

 

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

Graduates encouraged to apply for start-up scheme

Entrepreneur First opens applications with event at East London Tech City
Written by
Published on 12 January 2012

A government-backed scheme has opened applications to graduates who want to start their own businesses.

The Entrepreneur First scheme, which was launched by David Cameron in March, opened the application process with an event at East London Tech City – featuring presentations from MP Ed Vaizey and established graduate entrepreneur David Langer.

Graduates who successfully apply for the scheme will benefit from a two-year programme of training and mentoring, to help them start their own businesses. Langer, who co-founded GroupSpaces aged 22, is one of the Entrepreneur First mentors.

Reflecting on his own graduate experience, Langer said: “When we founded GroupSpaces in 2007, we were in a tiny minority of people taking this route, with many people who were more than capable opting for traditional graduate schemes in the City.

“Founding your own high-growth company out of university is always going to be challenging, however I believe it’s a very fulfilling and viable option for thousands of the most ambitious, driven graduates in the UK.”

Graduate entrepreneurs selected to enter the scheme will also be provided with access to funding via a network of investors; free legal advice and software; training developed by entrepreneurs; and the opportunity to network with major businesses and investors.

Opening the scheme’s application process today, Ed Vaizey, minister for culture, communications and creative industries, said: “Entrepreneur First will identify and nurture our most promising entrepreneurs. Successful applicants will receive the very best help and support to transform their ideas into successful businesses [and] it is these new businesses that will provide the growth and jobs we need.”

Phil Cox, head of UK, Europe and Israel for Silicon Valley Bank – a corporate sponsor of the scheme – added: “Access to funding is one of the biggest barriers that entrepreneurs face when they look to get their business ideas off the ground. For a graduate looking to start their first business this barrier is often insurmountable.

“That’s where Entrepreneur First can really make a difference. By identifying the UK’s most promising graduates and giving them access to the right investors, it can play a vital role in helping our most talented and ambitious young people become successful entrepreneurs.”

For more information on Entrepreneur First or to apply for the scheme, visit the Entrepreneur First website

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

30 ways to have fun and unite teams

A happy office is a productive office. So says learnpurple's Jane Sunley, who offers 30 ideas to kick-start workplace happiness
Written by
Published on 12 January 2012

If staff members feel happy and are enjoying their work, they’ll be more motivated and productive. When it comes to the subject of employee engagement, that rule is people management 101.

In turn this means they will perform well and achieve better results for your business. Imagine what this would mean for a team of individuals, all of whom are having fun at work and feel united; working towards one shared goal and vision…

Sounds like nirvana? It is perfectly possible with some focus and determination. For teams to work well together and have fun while doing so, it’s first important that people understand one another’s motivation – what makes that person tick. The fast way of understanding team dynamics is to use psychometric tests. There are plenty of different tests available in the market (just type it into a search engine and you’ll be inundated with them). However, we firmly recommend the tools iWAM® and SDI®.

These tests help you shortcut those first few months of a person joining you, or an individual moving to a new team, where everyone is trying to figure each other out and there’s often an ‘walking on eggshells’ feeling. They help you have honest conversations with your people by highlighting personality traits, management styles (both delivering and receiving), communication preferences and main motivators / drivers (e.g. money, power, people).

This then minimises possible conflict and enables the individual, and team, to settle in and become more productive much quicker. Also, if people have a full understanding of what drives themselves and their colleagues it legitimises feedback at this level, while providing a transparency that’s a perfect basis for solving issues and complex challenges.

Team dynamics are also seriously enhanced by having fun. People spend around 100,000 hours at work during their lives, so it stands to reason that they should be enjoying those hours. You don’t want to turn it into a comedy club though, so balance is key – ‘work hard, play hard’.

Here are 30 of our suggestions for enhancing fun at work that we’ve experienced or seen in action:

1. Have lunch together
2. Tell stories (helps new people feel part of the success story)
3. Use humour to get the point across
4. Manage time so there’s less stress and more time for fun
5. Share books and discuss them
6. Learn a language – maybe a multi-lingual member of the team could teach the basics of their language?
7. Learn to dance together
8. Sweepstakes for major sporting events such as the World Cup or Olympics
9. Introduce  fun warm-up exercises for team meetings
10. Get everyone to email round their top five achievements at the end of each week and introduce a fun element as the ‘PS’
11. Avoid taking stuff too seriously
12. Offer a reward and recognition programme which acknowledges ‘above and beyond’ service or work
13. Introduce a fun budget for treats or activities – which is managed by the team, not the manager
14. Have a company or team trip which gives lasting memories and becomes part of the organisation ‘story book’
15. Make a TV screen available for major events and sporting fixtures – this stops people taking authorised (and unauthorised) absence to watch and is a bonding exercise which, in our view, is worth a couple of hours’ down time
16. Talk about top five films, songs etc…
17. Brighten up the environment
18. Take breaks – helps revitalise and refresh making you more productive in the long run
19. Put up an employee photo board or a map with pins for their places of origin
20. Organise birthday celebrations
21. Present awards, spoof awards at Christmas
22. Provide food at meetings – but keep it healthy 23. Organise social events e.g. summer picnic
24. Arrange after-work events such as bowling, ice skating or theatre trips
25. After work drinks (in moderation) and nibbles on a Friday
26. Share around invitations to networking events and awards dinners
27. Train for a charity race / event together
28. Get outside – take a 10 – 15 minute walk with the team, even having a ‘walk and talk’ meeting
29. Have a ‘glass half-full’ attitude at all times – positivity makes solving issues much more fun
30. Start a competition with a small, inexpensive prize. Guessing total number of hits on the website, or opens of a marketing campaign.

Jane Sunley is CEO of talent management specialists, learnpurple , and author of people bible, Purple your People – the secrets to inspired, happy, more profitable people which can be purchased online. This article is based upon the chapter ‘Team dynamics and having fun’.

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

Cruise retailer seeking UK homeworkers to become franchisees

10 UK agents sought by 2012, earning 70% commission
Written by
Published on 12 January 2012

The world’s largest cruise retailer is to launch its US franchise model in the UK.

CruiseOne is seeking Brits to run home-based start-ups, with the potential to earn £54,836 a year.

That figure includes the deduction of marketing and technology costs, and accounts for six bookings each week, with an average value of £2,950. Each franchisee will be offered 70% retained commission, as well as full back-office and web support.

CruiseOne – which is operated by World Travel Holdings (WTH) – already has 720 franchisees in the US, Canada and Holland, and aims to have 10 UK agents by the end of 2011 alone.

UK franchisees will work as representatives for Cruise118, which is part-owned by WTH. The latest opportunity forms part of the UK expansion of WTH, which will also affect brands such as Cruises.com.

Cruise118 is a member of the British Franchise Association and is supported by a deal with Barclays to help fund start-up franchises. The franchising model is comparable to that of GoCruise, which is owned by Fred Olsen Travel.

James Cole, director at Cruise118, says he is committed to finding the right people to grow the business model. He added:

“We expect this to appeal to homeworkers who are active in their local communities. But if someone wants to have a physical retail presence or wants to do UK-wide marketing we would love to support them in achieving that.

“We are keen to speak to anyone who has a real passion for starting a new business. They do not need travel experience, but that would certainly be a benefit.”

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

Start-up secures £25K seed capital online

Written by
Published on 12 January 2012

A start-up business which helps members of the forces and emergency services find new careers has secured a £25,000 investment, thanks to crowdfunding website Crowdcube.com.

Using Crowdcube’s online funding page, London-based Personal Development Bureau offered 15% equity in its business – which will provide training and mentoring to the estimated 34,000 police and 75,000 armed forces personnel expected to lose their jobs over the next four years, as a result of government cuts.

Personal Development Bureau launched its funding page in August, raising £25,000 in less than two months, from 68 investors – each contributing between £10 and £3,300.

Founder Rupert Honywood said: “The funds raised will enable us to grow this business, helping the thousands of people that need our help.

“Crowdcube’s new method to raise capital is especially relevant to us because it enables the very people we serve – our members – to become actively engaged in the community as shareholders too. We’ll certainly be using Crowdcube for any future funding requirements.”

Crowdcube – which is itself a start-up, having launched in February 2011 – offers businesses an alternative way to source investment by asking ordinary people, clients and affiliates to invest as little as £10 in their business growth, in exchange for equity and other benefits.

Darren Westlake, managing director of Crowdcube added: “It is small businesses like Personal Development Bureau that are vital to our economy, particularly given their role in nurturing other start-ups. Yet many fail to get the finance they need to start up and grow.

“Despite the incentives provided by the government to get the banks lending to small businesses, seed capital is still a huge challenge for…start-ups unable to show three years trading figures, or for small businesses that don’t want to be encumbered with as much as 16% loan interest. Turning the general public into armchair dragons is the future of business finance in Britain.”

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

Stockton-based sign-maker speaks to Startups after being slayed on Dragons’ Den

Written by
Published on 12 January 2012

After his rough treatment on Dragons’ Den, Teeside sign-maker Alun Pearson has told Startups he “wouldn’t have gone on” if he’d known how gruelling the experience would be.

The Stockton-based entrepreneur – who was attacked by all the Dragons for his financial acumen and presentation skills during last night’s episode – says that entering the Den “went against my better instincts.

“I went on to promote my products, I was never selling my business to them. I told Peter Jones my business was included (in the package), which was a mistake.”

However Pearson was quick to defend his pitching ability, saying: “It’s not got a lot to do with the pitch, it’s to do with the edit. It’s an entertainment show.”

The show was filmed three months ago, and Pearson says “I washed my hands of it back in May – I didn’t even watch it last night.

“It was all crap. I felt like a plonker. I had good products, and I’ve got a successful business.”

Pearson’s company, N-Sign, turns over more than £1m a year and offers a range of products in the signage and engraving space. For more information on the company and its products, please click here.

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

How to use pay-per-click advertising

A step-by-step guide to using pay-per-click (PPC) advertising such as Google AdWords
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Published on 12 January 2012

What is Pay-per-click?

Pay-per-click advertising, or PPC, is an instant form of marketing, based primarily on internet search engines such as Google.

When you enter a search phrase into a search engine, you are taken to a page with two distinct sets of results. Down the centre of the page run the organic results; these are ranked solely on merit, with no advertising attached. Just above the organic results, and down the side of the page, you will see the sponsored results – these are commercial messages, bought by advertisers on a pay-per-click basis.

The sponsored results are extremely simple, comprising nothing more than a heading, brief description and URL. However they are often highly effective; because a pay-per-click ad is linked to a particular search term, it will only appear when the user types in that term, so it is restricted to a highly targeted audience through target marketing.

Google is without doubt the most famous name in pay-per-click advertising. Recent research suggests that its PPC platform, AdWords, attracts over 90% of overall spend in this channel in the UK. The bulk of the remaining 8% is taken up by the platforms run by Microsoft and Yahoo!

How does it work?

PPC is, fundamentally, based on an auction. You bid on the keyword(s) you want your ad to appear against – so if, for example, you run a budget flights business and want to appear top of the search rankings, you might bid on terms such as ‘cheap flights,’ ‘budget flights’ or ‘low-cost flights’, telling the search engine company how much you are prepared to spend in total, and how much you are prepared to pay for each click your ad receives.

The search engine will then decide on your ranking, taking into account the size of your bid. The more money you bid, the more chance you have of appearing high up the rankings. But it’s not quite as simple as that. The search engine will also factor in the quality, and relevance of your ad. If you bid a fortune, but your ad offers nothing to the site’s average user, you’ll struggle to get a high ranking.

How much does PPC cost?

Many of the smaller PPC providers require a fixed minimum monthly deposit, but the major search engines differ. Yahoo! gives its users complete freedom to set their minimum monthly deposit and minimum bid; Google does impose minimum bids and deposits, but these vary significantly according to the currency you use and the location of your billing address.

Matt Whelan, director of digital marketing agency Guava, says: “Typically, the cost varies by sector. It can be pennies if you have a low-value product – it might be 10p if you’re selling products that are only £10. But for high-value products like mortgages or car insurance, you have to be up there ready to pay up to £20 a click.”

If you do wish to go for a high-value search term, it’s vital that you think carefully about whether this is going to be worthwhile. If you’re paying £20 per click and your ad generates a 5% conversion rate, you’ll have to spend £400 to make one sale – which may not be financially viable. As PPC operates on an auction model, it’s all too easy to get sucked into a bidding war, and end up paying way over the odds for your keyword.

What advantages does PPC offer over other advertising models?

As a start-up entrepreneur, you’re likely to have a limited marketing budget and a modest brand reach. PPC is well-suited to these circumstances; there’s no barrier to entry, and any company can utilise it. You can bid as much or as little as you like, so if you only have £50 to spend and are happy with a modest ranking, or a less popular keyword, you can get your advert out there without breaking the bank.

Mark Rushworth, an SEO specialist who heads up the digital team at Bite Digital, says “the immediacy” of pay-per-click is another advantage, adding that the model is “phenomenally quick. We specialise in organic search and there’s no competition – if you want to make money for the first three or four months you’ve got to go PPC.”

What type of small business is PPC suitable for?

For small firms which don’t do much business on the internet, are based in false advertising or lack an effective web presence, PPC may be a waste of time. However, a presence near the top of the search engine rankings can provide real commercial gain for companies in a range of sectors.

According to Mark Rushworth, PPC is “much easier for retail but tradespeople can benefit because they tend to be geographically limited so they can maximise on it. You can also bid to be first on Google Places, which follows a similar model to PPC – on Google Places, there’s only one spot you can buy.”

What sort of click-through rates can I expect from my ad?

This will completely depend on the quality of your ad. Mark Rushworth says that, on some accounts, his clients are seeing click-through of 40-45%, even on limited spend. However, this won’t be the case for everyone: only those who optimise their campaign and think clearly about their objectives have a chance of such a good return.

How do I set up a PPC account?

It depends on which site you’re using. However, for Google, the process is extremely simple. You have to set up a Google account, go to the AdWords page and set up a campaign. Then you can set your total budget, set the amount you wish to pay per click, and bid for the keywords you wish to advertise against.

How do I ensure a high ranking?

First of all, you must make sure you do your research before selecting your keywords. Find out what people are searching for, and be prepared to tweak your key messages to suit the search terms.

It’s also vital that you look at less obvious keywords. A mainstream search term may attract more users than a more obscure one; however, if you’ve only got a limited budget, you’ve got more chance of securing a high ranking with a less popular term. And, because the less common terms are cheaper, you can target more of them.

It’s also important to completely tailor your ad to the results you wish to appear against. The more relevant your ad is, and the more it can help the reader, the more likely it is to rank highly. Make sure the keywords in your ad match the keywords which are appearing in your organic ranking, and that your website does exactly what your ad says it will – otherwise Google will punish you.

How do I ensure my ad delivers revenue?

With PPC, clarity is key. You have to think about the context in which people view your ad, and signpost your service with simple, compelling language.

According to Mark Rushworth, “it’s ultimately about your ad being more emotive than the others – if you’re cheaper, put a physical price in the ad. You’re pandering to the searcher’s need, so you’ve got to think what they are looking to find out. You’ve got to turn the process on its head. If they’re interested in guarantees, price, free delivery, you’ve got to factor these in.”

Matt Whelan adds: “The best thing a company can do is to look at its website first and assess what will complement the PPC. You need to have a good conversion rate, a good landing page, a low bounce rate. It doesn’t matter how good the agency is, how well optimised the ad is, it won’t work with a bad website.”

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

10 ways to motivate staff

The mental well-being and happiness of your staff can be crucial for your business’ success, here's the top tips for getting the most out of your team
Written by
Published on 12 January 2012

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Staff morale is more difficult to measure than sales or margins, but is equally important. Improving employee happiness is also an easy way to improve employee engagement and productivity, so the mental wellbeing and morale of your staff is crucial for your business’ success.

Not addressing this now could be expensive for your company later – either through an inefficient workforce or high staff turnover. However, fostering job satisfaction doesn’t have to cost the earth.

Startups spoke to a panel of entrepreneurs to find out their top tips for motivating staff…

1) Treat everyone as an individual

Respect that different employees have different needs. “Every incentive doesn’t necessarily motivate every individual,” says Andrew Backhouse, national contract director at Timothy James, a 2010 winner of The Sunday Times 100 Best SMEs to work for. Get to know each member of staff and show you understand them by being flexible to their personal situations. For example, if an employee is in a long distance relationship, you may want to let them leave early on Friday afternoons. As a result, they’ll be more inclined to put extra hours in during the week to keep on top of their workload.

2) Praise good work and offer feedback

“We believe in public praise. When someone does a good job, we congratulate them in front of everyone,” says Bradley Placks, co-founder of MyResourcer. Regular feedback and encouragement makes employees feel positive – and that will be invested back in to your business. It is important to be genuine, so find something that has impressed you, even if it is as simple as an employee’s presentation, and let them know that they are doing it well. Following employee demand, some companies have introduced six monthly appraisals. This offers a good opportunity to encourage staff, clarify any issues, and re-establish with the employee their expectations of the company and your expectations of them.

3) Lead by example

A productive team needs a productive leader. As the top dog you need to embody the company’s brand yourself and be true to its ethics. However equally important is that employees see you putting in as much energy as them – if not more. “If you always slope off early on a Friday, these small messages have a huge impact on your staff, undermining any formal messages of motivation that you are trying to get across,” says Adrian Moorhouse, managing director of Lane4. “A good leader needs to lead by example, by role-modelling the behaviours that are expected of staff. Be excited by new challenges, show real enthusiasm for projects and demonstrate your love of the job. Positivity breeds positivity.”

4) Encourage people to take a break

Whilst an employee who doesn’t optimise their annual leave might seem like a good deal for your business, everyone needs to take a break in order to operate at their full potential. Approach people who haven’t used their holiday entitlement and encourage them to get away. This will also show employees that you care about their wellbeing. Similarly, some organisations allow employees a few days a year to engage with the community. Michelle Fuller and Chris Russell, co-founders of eDigitalResearch, run a Personal Development Week for their team. “Every employee gets the opportunity to expand their skill set or get stuck in at charity events, to help with their personal development.”

5) Offer benefits that boost morale (but don’t break the bank)

Sometimes it is the little things that count. While large organisations may be able to offer corporate holidays in sunny climes, a gesture as simple as having fruit delivered to the office each week can show employees that you care. Tailor benefits to your workforce. You could bring a masseuse in once a month to give each employee a 10 minute boost, organise a team activity afternoon or a barbeque. “Events don’t have to be expensive, just well-planned and thought out,” says Damian Milkins, CEO of Control Circle.

Where possible, invite staff to bring their partners as well. “Having a good relationship with people’s partners really helps,” says Simon Corbett, founder of Jargon PR. “All those times when people stay late, instead of getting home to an earful, they get a much more sympathetic response.”

Compare HR Agency Quotes With Startups

6) Give ownership to your team

While new employees need clear instructions and guidance, once they are on the right track, let go of the reins. Leave them to be led by their own initiative and congratulate them for doing so. “Allow them to work well and without much input. It’s the little things that give ownership to teams and allow them to feel trusted and motivated,” says Dominic Monkhouse, managing director of PEER 1 Hosting and a former consultant for The Sunday Times 100 Best Companies to work for. As well as inspiring self-confidence, this hands-off approach may allow employees to navigate your firm from a new perspective, potentially exposing inefficiencies, untapped opportunities and prospective innovations.

7) Run a ‘no blame’ culture

“When something goes wrong don’t blame the person; analyse the reasons and change whatever actually caused the issue in the first place – learn and improve,” says John Sollars, founder of Stinkyink.com. If you are always pointing the finger, employees will feel tense, which can restrict initiative and innovation. Even if an employee has committed a serious offence, take it as an opportunity to review your recruitment process. It may be that you are not asking the right questions at interview.

8) Communication is key

By keeping open lines of communication with employees and listening to their ideas, they will feel more connected to the progression of the business and thus more motivated to contribute to its future. As a director, it is easy to get distracted by your own objectives but in the present economic climate it is more important than ever that staff are kept informed about changes in circumstances – including how new legislation could affect the company. Henry Braithwaite, Operations Director of Market Makers, recommends twice weekly meetings “when the whole company comes together and shares the successes of the week and what is going on in the company as a whole” as well as an “open door policy” to the manager’s office. Simply showing employees that they are being listened to can be enough to boost morale.

9) Be flexible

Whilst all companies need employment agreements in place to set standards, be prepared to be flexible to reasonable requests for additional leave. Respect that your employees have personal lives to balance with their work commitments and don’t put additional pressure on them when, for example, they have to pick up their children, take care of a sick relative or leave early for a washing machine to be delivered. To avoid completely forfeiting their labour, assist employees with flexible working by helping them to receive their work e-mails on their smartphone or home computer. If you want to be particularly generous, IT company acs365 recommends offering staff additional leave on their birthday. “As part of your commitment to acknowledging the importance of work-life balance, a paid day off is the best present you can provide to staff. This type of initiative helps to create a positive work culture, improving and uplifting staff morale,” a spokesperson says.

10) Get the little things right

Sometimes getting the little things right is more influential than an occasional grand gesture. It is easy to underestimate the importance of basic essentials for a positive working environment. These may include well-maintained toilets, basic kitchen facilities and filtered tap water – conveniences that don’t cost the earth. “It is often possible to quickly fix many of the day-to-day gripes that bother your employees. Listen to what your employees are saying about their workplace and concentrate on these first,” says Laetitia Monereau, head of HR at Simply Business. “You need not spend a vast sum of money improving your staff morale.”

Startups.co.uk is reader-supported. If you make a purchase through the links on our site, we may earn a commission from the retailers of the products we have reviewed. This helps Startups.co.uk to provide free reviews for our readers. It has no additional cost to you, and never affects the editorial independence of our reviews.

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

How to start an IT consultancy

There's a lot more to IT support than turning it off and on again. Here's how to make your offering stand out in a crowded market
Written by
Published on 12 January 2012

If you’re thinking of starting a business to become an IT consultant, these topics are key to consider:

What is an IT consultancy and who is it suited to?

So, you want to be the superhero service provider who bursts into offices to save the day? Or rather fix people’s computers? IT consultancy is a popular option for those looking to start their own business. If you have the know-how and the techy smarts, you can offer an invaluable service to almost every business out there. After all, who doesn’t need IT support these days?

That cuts both ways, though. It is a crowded market, and these days IT consultants offer everything from run of the mill IT support, helpdesk and onsite services, to server monitoring, disaster recovery, security and offsite backup. From the get-go, you need to work out exactly what your offer is, and how you can convince your clients that your business is the true superman of IT support.

To set up an IT consultancy, you really need to know your stuff. You’ll be up against people who live, breathe and dream ICT, and you’ll need to be on their level. Saying that, if IT is your passion and you’re a pro on the inner workings of PCs, the sine qua non of servers and the set-up of networks, then don’t worry too much if the letters after your name don’t have anything to do with third level or vocational qualifications.

Roger and Paul Timms of Maindec, an established third party IT services and support provider that’s been going strong for some 30-odd years, believe that you shouldn’t worry about qualifications. Roger started the business 32 years ago, and he was not at all qualified in terms of having gone to university.

“Don’t let a lack of qualifications hold you back too much. It takes a little bit more than qualifications,” Roger says: “It’s good to be one of the ‘Alan Sugar brigade’!”

You’ve got to have the entrepreneurial spirit. You’ve got to be committed. And most importantly, you should have a good idea of the area of the marketplace you want to attack. When Roger started out, the market was very buoyant: IT was new, and there was a lot of pioneering going on. There were a lot of opportunities. Now, it’s very competitive and the market is quite crowded. So make your IT offering stand out.

Creating your business plan and researching the IT consultancy market

“It’s very important to find your niche,” Roger advises. “And just be in a position very positively to sell that to people. If you know what you’re good at, you’ve got to sell it.”

Take the time to scope out your competitors. By doing the research first, you can identify gaps in the market, and be in a good position to differentiate your offering. What needs are not being met? How could you do things better? Once you have a clear idea of what your offering will be, and you’re sure you have a market for it, you’ll be in a position to develop your business plan around this.

As an IT consultancy, you can be so much more than the IT guy who comes in to the office twice-monthly. But when starting out, avoid trying to do too many things. “If there’s something you know you want to do, don’t be afraid of sticking to it,” Paul of Maindec advises. “Don’t switch about too much, and don’t jump on the bandwagon of new fashions. If you start going down one path, stay focused on that. Stick to what you’re confident with. Don’t be distracted.”

IT Consultancy ideas

First step in planning: decide on your speciality. Here are some starting points:

The expert

In addition to a basic helpdesk and field-visit package, why not complement existing in-house IT teams by offering user training and support? Actively identify user training requirements. You might provide IT infrastructure audits and reviews as well as designing services and putting them in place. Your expertise can be sold as a value-added deal.

The security pro

As well as offering a helpdesk, you could be the firewall to end all firewalls. If you can demonstrate that your service can minimise potential security threats, you’ll be every business’ best friend.

The remote in control

Your field engineers could have a much wider reach if they facilitated remote working for the networked generation. Your company might specialise in remote access methodologies for key workers.

The real-time king

Be the helpdesk with psychic powers. You could promise to fix the IT headache before it affects your clients. Offer monitoring and maybe even provide a time promise: “Our engineers will resolve your issue in 50 minutes or….”? You could even offer clients updates and real-time tracking of live support issues over an extranet.

Plan to do what you’re good at first, then build up a client base. Other things will follow. As Roger of Maindec says: “IT hardware support is the basic offering. What generally happens is once you start offering one thing, your clients like what they get and they ask for more. You end up having to provide more. If you’re good, then you’ll be able to carve a niche for yourself.”

Once you’ve got your niche, do your needs analysis…and plug all the gaps!

What are the rules and regulations for an IT consultancy business?

There are a lot of rules and regulations you should be familiar with in IT. When you do your needs analysis, you will know how to divvy up your funds as a start-up. You might spend on marketing or on infrastructure – but first and foremost, you should invest in yourself.

Knowledge is key: it’s all about reputation. If you’re dealing with online security, for instance, there are data and privacy issues you must look into. And if you’re dealing with hardware, you have to be aware of the environmental implications. Retailers will give you support with their hardware, and provide you with information regarding software licensing and IP issues. But it’s up to you to know what questions to ask.

In terms of industry knowledge, Paul Timms of Maindec suggests you read up on ITIL, which is the ‘go-to’ for IT service management companies. It’s the information industry’s data library, offering qualifications and advice on best practice and process mapping: basically, different ways of doing business in IT. It is, according to its website, the ‘most widely adopted approach for IT service management in the world’. According to Paul, going into IT consultancy with a knowledge of this will be very helpful.

If you’re a director, then it’s always worth taking a directorship course. That way, you’ll be aware of your legal obligations and you won’t want to fall into any traps. From a business point of view, it’s worth considering the IOD, according to Roger of Maindec. They have a very good knowledge base for businesses: you have to pay some money, but they do offer a great deal in return.

“People don’t often grasp the gravity of what it is to be a company director,” Roger says. “The legal obligations are on your head. It’s all well and good being in control, but if you go and do something silly, you don’t want to be in court fighting your corner without a leg to stand upon.”

There are many courses available all over the country. You don’t need to be a member of the IOD, but you do need to have an awareness of your obligations.

In terms of industry bodies that can help you, there are many that cater for IT professionals. “Because IT is such a broad umbrella, there are lots out there,” says Paul. “If you were going to do something like network support, for instance, there’d be a support group for that. A lot of stuff these days is online. Following social media technology keeps you very up to date.”

You’ll find a list of helpful links to industry bodies and advice under the ‘Useful Contacts’ heading of this article.

How much can you earn running your own IT consultancy business?

Sorry to break it to you: IT consultancy is incredibly competitive. There are thousands and thousands of IT consultancies out there. If you think you’ve got a good idea, someone else will be doing it too. And not just one person, probably hundreds! This has a direct bearing on how much you can charge for your service and potential earnings.

The key to success is differentiating your offering in the marketplace. Paul Timms of Maindec explains: “We’ve differentiated ourselves by standing for things that we believe in. We’ve got a customer base that buy into that. We’re lucky enough to have a bit of heritage now, and that goes a long way. But if you’re a start-up, you have to be very clever and think hard about how you’re differentiating your offering.”

There are many ways you can do this. There are three main paths: you can be the best; you can be the biggest provider (for that you’ve got to have very deep pockets); or you can start off by trying to undercut people already in that marketplace. Now if you start out trying to undercut your competitors, not only does it mean you’ll end up with not very good margins at all, you’ll also devalue your offering and put your start-up in real danger. So it’s really a good idea to go out there and try to establish yourself as the best.

“Convince your customers that there really is nobody better than you,” Paul advises. “Get customers to buy into that. Sell on value: you may not be the cheapest, but you’re getting the best value.” If people like you, and you build up a base of respect and trust, then you’ll do well: build up a reputation in the first instance. Particularly as a start-up, that’s what you need to focus on. Once you’ve established your group of loyal customers, they’ll be very happy to refer you. And you’ll build up a client base that way.

In terms of business costs, like any start-up you’ll need to manage your money very, very carefully. When you’re starting up, don’t invest in anything you don’t absolutely need. Can you borrow customers’ desk space, for instance? You may not need to have your own office to start off with. Do you need to have that expensive phone, PC, laptop? There are cheaper ways of doing anything. It’s getting that economy from the start.

Be firm with your business model. It does take a while: you have to be patient. Hopefully have enough resources to carry you through! Getting a hold of funding these days isn’t easy: you’ve either got to rely on your own resources or you’ve got to find someone out there to back you. Once you manage to get out there and sell your service, hopefully you’ll be able to establish your customer base and move from strength to strength.

IT consultancy marketing tips and useful contacts

Go for simple marketing: the best thing to do is to set up a good website. Don’t be too clever with it: just put the facts up there. And generate some good word of mouth. Make sure you employ highly trained staff too, because the basis of your business is not the smoke and mirrors of advertising – it’s the quality of your service. “Keep it simple,” advises Paul Timms of Maindec. “More important than marketing is reputation. It’s worth getting in good staff from the outset so that you don’t get yourself in trouble!”

The power of the human touch cannot be underestimated. You may be an IT consultancy, but first and foremost you’re in the service industry. Your website may be slick, your service may be top notch, but you need to build up relationships with your clients from day one.

Paul Timms of Maindec explains: “More than ever, people go to find what they want on the internet. People Google everything. But certainly when we started up in business, the first few years were built on relationships. And I would advise any start-up business starting out today to at least have a few key customers that you can really trust to give you honest feedback.”

After all, it’s all well and good trying to provide a service. But if you’re trying to provide a service that nobody wants, or that’s not competitive, then you shouldn’t bother: any customer who can give you that feedback is really helpful. And once customers like the service you provide, they will be happy to refer you. So make it easy for them! If your focus is on customer satisfaction, then show how you are delivering value.

Useful contacts

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

Top 10 ways to generate repeat business

How to keep your customers coming back for more
Written by
Published on 12 January 2012

Startups.co.uk is reader supported – we may earn a commission from our recommendations, at no extra cost to you and without impacting our editorial impartiality.

If you’re focusing all your energies on winning new business, rather than servicing existing clients, you’ve got your priorities completely the wrong way round. Repeat customers are cheaper than new ones; you might have to spend thousands on target marketing and customer research to woo new clients, but, with existing customers, the hard work is already done.

Furthermore, a repeat customer can become an ambassador for your brand, spreading the word about your company among their friends and partners. And, the more times a customer buys from you, the more they will come to trust and you – thus the value of their purchases will go up, not down.

There are ten simple ways you can maximise the value of your existing client base, and cash in on the work you did to entice them in the first place.

Here are the top 10 ways to get repeat business:

1. Get it right first time

If you don’t get it right the first time you sell to a particular customer, they won’t buy from you again, so a great first impression is crucial.

With a first-time customer, make sure every little detail is dealt with as professionally as possible. Handle all correspondence in formal language, with a personal greeting on each e-mail, and assign a specific member of your team (if you have one!) to deal with the customer, so they build up a rapport and provide a clear point of contact.

Keep the customer informed of every development in the delivery process, and, if the product or service you’re selling is particularly complex, offer proactive advice to help the customer understand it. A week after the product has been delivered, phone the customer to ask if they’re happy with it.

2. Spend money on after-sales support

This may seem slightly basic, but it’s not; many companies put all their eggs in the pre-sale basket, and don’t spend any time or money on ensuring the customer is happy after they buy.

If you’re handling after-sales support yourself, make sure you treat each request as urgent, and aim to respond same day. If you have staff handling after-sales for you, give them clear deadlines for responses, and brief each of them on all your products, so they can give the customer real insight.

3. Keep customers’ details on file

Again, this might sound obvious, but you’d be surprised how many firms fail to keep accurate records for the firms they sell to.

Create a contacts book for all your customers. For each one, include:

  • The name of the person you’ve dealt with
  • Their personal phone number and e-mail address
  • Full postal address details
  • A brief description of what they’ve previously purchased from you
  • Details of any feedback they provided – if they liked a particular aspect of the product/service, you can use this as a reference point for future business.
  • Any personal information you think relevant – if you think their age, sex, budget, company progress, personal background or buying preferences will make any difference to the products they buy in the future, keep a note.

Alternatively, you might think about investing in customer relationship management (CRM) software for your small business. This can be expensive, and may be beyond the budget of a start-up business, but it will create permanent, electronic records for each of your customers, and organise your customers into clear groups.

4. Tailor your alerts

Use the information you’ve stored in your contacts book, or CRM software, to deliver relevant, targeted alerts on each new product or service.

Don’t just send out a blanket mailshot to all your existing contacts. Make sure you only send info on new products to customers who have bought similar things from you before, and have the resources to purchase this new item.

If possible, create tailored e-mails for each individual customer, explaining why they’ll like your new offering. Mention their previous purchases, and the specific benefits the new product or service will bring to their business.

5. Maintain contact

Although product/service alerts are often effective, many customers will think repeated sales pitches are intrusive and annoying, so intersperse your pitches with relevant, objective information.

Ask them for feedback on the product/service they originally bought from you; direct them to a particular news story, or market trend, you’ve noted in their sector; or simply ask them how they and their business are doing.

6. Think about special offers

By offering, say, a 10% discount or a three-for-two offer to existing customers, you’re demonstrating to them, and the wider world, that your company really values the people who buy from it.

Also, think about offering free trials of new products/services to your existing products – even if they don’t choose to buy what they try, they’ll be pleased you’ve thought about them.

7.  Add little touches

Think about little ways you can recognise existing customers, and show them their business matters to you.

You might wish to send a hand-written letter, thanking them for their custom; alternatively, consider sending a small gift, such as flowers or chocolates; if you have a shop, try inviting clients to an out-of-hours party; or, if you have tickets for an entertainment event, think about inviting them along.

8. Increase your profile

The more visible you are in your locality, the more people will trust you – and the more likely people are to buy from you repeatedly.

Make sure you join a local trade body, donate or volunteer for local charities, and organise networking events. Nothing should be too much trouble – if it elevates your profile, it’s worth doing.

9. Maximise your online presence

In addition to creating a top-notch website, you need to think carefully about utilising the online space. Here are some things you can do:

  • Create a forum on your website, so customers can report any problems or ask questions about what they’ve bought;
  • Create an online newsletter, and invite your customers to sign up – so they can receive news about your business;
  • Link to your customers’ websites – this will boost your own search engine ranking, and create a clear bridge between you and your clients;
  • Use social media – follow your customers on Twitter, or add them as a friend on Facebook.

10. Keep re-evaluating

Even if you give each client the red carpet treatment, they’ll still ditch you if they can find a cheaper, or better product elsewhere.

Keep a constant eye on your competitors – the way they change their prices, their offers and discounts, and the products they bring to market. Never, ever take your existing customers’ loyalty for granted.

Startups.co.uk is reader-supported. If you make a purchase through the links on our site, we may earn a commission from the retailers of the products we have reviewed. This helps Startups.co.uk to provide free reviews for our readers. It has no additional cost to you, and never affects the editorial independence of our reviews.

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

Selling on Amazon: a beginner’s guide

We explain how to get started selling on Amazon, plus how to use the Fulfilled by Amazon (FBA) scheme and what share of profits to expect.
Amazon marketplace business
Written by
Published on 12 January 2012

Selling on Amazon is a great way for beginners to start a business online with access to millions of potential customers.

After all, Amazon is the biggest online marketplace in the UK, with annual sales of nearly £17.5 billion. The COVID-19 pandemic saw the company boom, with an 82% increase in revenue compared to pre-pandemic levels.

For those looking to start a business without holding inventory, Amazon can be an ideal platform to partner with a dropshipping supplier. On the other hand, regular businesses can benefit from greater control over their operations, such as offering faster shipping times and being able to manage product quality better.

In this guide, we’ll walk you through everything you need to know about getting your business up and running on the Amazon marketplace.

💡Key takeaways

  • There are two primary models when selling on Amazon – dropshipping or using Fulfilment by Amazon (FBA).
  • Typical selling fees include referral, fulfilment, inventory, and high-volume listing.
  • It typically takes up to five working days to get paid through Amazon selling.
  • Product listings must have essential information like product IDs, clear descriptions, and high-quality images.
  • You can sell internationally through Amazon’s global selling program, including the US, Canada, Japan and other European countries.

Key areas to consider when selling on Amazon are:

How to start selling on Amazon

Just like starting your own business, you shouldn’t just jump into Amazon selling without careful planning and preparation. That’s why it’s important to have a comprehensive business plan to ensure you approach the Amazon Marketplace with a clear direction and a solid foundation for success.

So, before you market your products, there are a few things you need to do first. This includes:

Setting up your Amazon Seller Account

  • Sign up as a seller: Go to the Amazon Seller Central website and click “Sign Up”.
  • Choose your account type: You can either choose an individual plan or a professional plan. Here’s some more info:
    Individual plan: Ideal for those selling fewer than 40 items per month, with no monthly costs apart from a per-item fee.
    Professional plan: Best for those expecting to sell more than 40 items per month, with a monthly subscription fee but access to additional selling tools and features.
  • Complete registration: Fill out the registration form with your personal and business information, including your name, email address and bank account details for payments.
Quick tip: seller essentials

  • Business information: This means deciding on your business structure (e.g. sole proprietorship, LLC, etc.) and gathering any necessary licenses or permits.
  • Bank account: Create a business bank account ready for Amazon to deposit your sales revenue.
  • Product ideas: It’s useful to have an idea of the types of products you want to sell, as this will guide your market research.

Determining your selling method

One of the most important decisions you’ll make is choosing the right selling method that aligns with your business goals and resources – whether you’re interested in creating your own brand, leveraging existing products or operating with minimal inventory. Here are some popular selling methods on Amazon to consider:

  • Private label: Allows you to create your own branded products that are manufactured by a third party.
  • Retail arbitrage: Purchasing discounted products from retail stores – such as clearance items or seasonal items – and reselling them at a higher price on Amazon.
  • Wholesale: Involves buying products in bulk from manufacturers or distributors at a discounted rate and then selling them individually on Amazon.
  • Dropshipping: A fulfilment method where you partner with a supplier to sell products without holding an inventory.
  • Print on Demand (POD): A variation of dropshipping that focuses on custom-printed products, such as t-shirts, mugs and phone cases.
  • Handmade products: If you create handmade items – such as crafts, jewellery, or artwork – you can sell them on Amazon through the Handmade at Amazon program.

Conducting market research

The first step to your market research is to find profitable products for your Amazon businesses. Tools like Amazon Best Sellers, Jungle Scout or Helium 10 can help you discover high-demand items with low competition.

Once you’ve shortlisted your potential products, look at competitor listings to understand their pricing, features and customer reviews. This will help you to identify any potential gaps in the market that you can capitalise on and set your offerings apart from others.

Additionally, it’s important to consider customer needs when choosing products. You can find common pain points and preferences through customer reviews, as well as insights into what buyers are looking for. 

Developing a marketing strategy

Start by identifying your target audience, as this will help determine your messaging and promotional tactics. 

Utilise resources from Amazon Advertising, such as Sponsored Products or Sponsored Brands, to increase visibility on the platform. This will allow your products to appear prominently in search results and on competitor listings, making it easier for potential buyers to discover your offerings.

But don’t solely rely on Amazon’s internal advertising alone, as you should also look into external channels to boost your reach. For example, social media platforms like Instagram, Facebook and TikTok can be effective for showcasing your products through engaging content, such as working with influencers through affiliate marketing.

Moreover, make sure to consistently analyse your marketing efforts through metrics and customer feedback to refine your approach, ensuring that your strategy can evolve with changing market trends and customer preferences.

Sourcing your products

Look for potential suppliers or manufacturers that align with your chosen selling method. For example, if you opted for private labelling, look for manufacturers who specialise in your product category and can accommodate custom branding. For retail arbitrage or wholesale, you can explore online platforms like Alibaba or ThomasNet to find reliable suppliers at competitive prices.

Once you’ve found the right supplier, you’ll need to negotiate terms that work for both parties. Discuss pricing to ensure you can maintain healthy profit margins while remaining competitive in the marketplace. This involves clarifying minimum order quantities (MOQs) to understand the minimum number of units you need to purchase, which can help manage your initial investment.

You should also address shipping arrangements, including lead times, shipping costs and delivery methods, to ensure timely fulfilment and customer satisfaction.

Creating product listings

Optimise your listings with clear and engaging product tiles that highlight a product’s key features and benefits. 

Create compelling descriptions that provide detailed information about the product, including specifications, uses and any unique selling points. Ensure to use high-quality images and incorporate relevant keywords throughout your title and description to improve your search visibility on Amazon.

Selling on Amazon FBA (Fulfillment by Amazon)

If you don’t want to manage your own package and shipping process, then you can utilise the Fulfillment by Amazon (FBA) feature – whereby you sell it and Amazon ships it.

With FBA, a customer stores their products in one of Amazon’s 20-plus UK-based fulfilment centres. These centres, also known as warehouses, are tasked with directly picking, packing and distributing your products to customers around the country. Amazon also provides customer support and manages returns on your behalf.

How do I set up FBA?

Setting up FBA is a straightforward process that allows sellers to leverage Amazon’s logistics and customer service. Here’s a step-by-step guide to help you get started with FBA:

  • Create an Amazon Seller account: If you don’t already have an Amazon Seller account, go to the Amazon Seller Central page and select “Sign up”.
  • Set up FBA: Once your account is set up, log into Amazon Seller Central and select the gear icon on the top right corner. Select “Account info” and then “Manage” on the seller account information page. There, you’ll see the option to register for FBA.
  • Create product listings: Go to the “inventory” tab and select “Add a Product”. You can either list new products or convert existing listings to FBA. When adding or editing a product, select “Fulfilled by Amazon” as the fulfilment method, as this will ensure your products are stored and shipped by the company.
  • Prepare your products: Make sure that your products meet Amazon’s packaging and labelling requirements. This includes using appropriate materials to protect your items during transit. You can choose to label your products yourself or use Amazon’s FBA Label Service, where they label your items for a small fee. If you decide to label yourself, ensure to apply FBA labels to each unit.
  • Create a shipment plan: Go to the “Inventory” tab, select “Manage FBA Inventory”, and click on “Send/Replenish Inventory” for the products you want to send to Amazon. From there, Amazon will guide you through the shipment process, including your preferred shipping method, product quantity and shipment ID. You should also be mindful of Amazon’s shipping restrictions.
  • Ship your products: Start packing your products and include the shipment ID on the outside of your packages. Choose a shipping carrier (e.g. Royal Mail, DPD and Evri) to deliver your products to Amazon’s fulfilment centre.

What are the costs involved when using FBA?

According to Amazon’s pricing page, the cost to sell on the platform depends on product category, fulfilment strategy and other variables. However, the typical costs include selling plans, referral fees, fulfilment fees and other costs.

Selling plan costs

Here’s a brief overview of the costs associated with individual or professional selling plans:

An overview of Amazon's selling plan costs.

You can find out more details on Amazon’s selling plan page.

Referral fees

A referral fee is the cost sellers pay for each item sold. These fees are a percentage of the total sale price and vary based on the product category. Here’s a quick example of how referral fees work:

A screenshot of a table showing Amazon's referral fees for certain items.

You can find out more details on Amazon’s referral fee schedule.

Fulfilment fees

Fulfilment fees cover the costs associated with picking, packing and shipping your products to customers. They also depend on whether you’ll ship the products yourself or use FBA to handle your logistics and offer Prime shipping.

A screenshot from Amazon's website detailing Amazon's FBA fees.

Additional selling fees

  • Inventory fees: If you store inventory in an Amazon fulfilment centre, you’ll have to pay a monthly inventory fee. Other fees might apply as well, including long term storage fees, overage fees and removal order fees.
  • High-volume listing fees: This will only apply if you exceed 2 million Stock Keeping Units (SKUs) in a month, and will be applied to your highest number of SKUs above 2 million at any time during that month.
  • Refund administration fee: If you refund a customer for an order that’s already been paid for, Amazon will refund you the amount of the referral fee you paid for the item(s), minus the refund administration fee, which is 20% of the applicable referral fee.

You can find out more details on Amazon’s additional costs page.

Ultimately, using Amazon for your fulfilment needs can be cost-effective. However, it depends on the number of items you are selling and shipping each month. If you are selling low volumes of products each month, it would be more beneficial from an affordability perspective to manage your own order fulfilment.

Either way, to see whether the service would be right for you, we recommend you add up the costs of overheads you could be spending on warehouse space, packing supplies, postage and labour, dealing with customer service inquiries and returns handling. From there, work out whether the Amazon charges will be cheaper.

Dropshipping on Amazon

If you’re interested in starting a dropshipping business, Amazon can be a good place to start.

How is dropshipping different from FBA?

Although the two may appear similar, there are key differences between FBA and dropshipping that you need to be aware of.

With FBA, you send your products to Amazon’s fulfilment centres, where the company will manage storage, packing, shipping, customer service and returns. This allows for faster shipping and the benefit of Amazon’s trusted brand, but it means that you’ll have to purchase and hold any inventory upfront, which can increase costs through fulfilment and storage fees.

On the other hand, dropshipping on Amazon will allow you to list products without holding any inventory. When a customer places an order, you purchase the item from a third-party supplier who ships it directly to them. This reduces upfront costs and eliminates the need for inventory management, but it places more responsibility on customer service and may result in longer shipping times.

Overall, the choice between FBA and dropshipping depends on your business model, budget and how much you want to control inventory and customer experience.

How does dropshipping on Amazon work?

To set up dropshipping on Amazon, you’ll need to sign up as an Amazon Seller with either an individual or professional selling plan. Here’s how the rest works:

  • Choosing products to sell: You can choose the products you want to sell on Amazon from different suppliers or manufacturers. Make sure to conduct market research to find profitable and in-demand products with low competition.
  • Creating product listings: Once you’ve selected your products, you can create listings on Amazon. Write detailed product descriptions, add high-quality images and set your prices. You do not need to mention that you are using a dropshipping model in your listings.
  • Placing orders with suppliers: When a customer makes an order for one of your products, you’ll receive a notification from Amazon. From there, you’ll need to place an order with your chosen dropshipping supplier and provide them with the customer’s shipping information. The supplier will then ship the product directly to the customer.
  • Managing customer service: As the seller, you are responsible for customer service, including handling inquiries, addressing issues and managing returns. This can involve communication with both the customer and the supplier to resolve any issues.
  • Fees and profits: When dropshipping on Amazon, you’ll need to account for various fees, including referral fees and potential shipping costs from the supplier. Your profit will be the difference between the selling price on Amazon and the cost of the product from the supplier, minus any fees.
Other important considerations

Make sure to familiarise yourself with Amazon’s dropshipping policy to ensure compliance. Amazon requires that you have an agreement with your supplier where you are the only seller of record on all orders. It also prohibits certain practices, such as purchasing products from other Amazon sellers and shipping orders with package slips that don’t name you as the seller (e.g. using a third-party supplier’s name).

You should also choose reputable suppliers to ensure quality products and reliable shipping times. Delays or poor product quality can lead to negative reviews and account issues on Amazon.

How to register products to sell

Once you’ve set up your Amazon Seller account and chosen your preferred selling method, it’s time to get your products up and running.

First, you’ll need to choose the category that best fits your product. Make sure to check Amazon’s category guidelines so that your product complies with them.

You’ll also need to gather the necessary information before registering your product. This includes:

  • Product name: The title of your product.
  • Brand name: The product’s brand name or manufacturer. 
  • Product ID: This can either be a Universal Product Code (UPC), European Article Number (EAN) or International Standard Book Number (ISBN), depending on the product type.
  • Product description: A detailed description highlighting the product’s features and benefits.
  • Product images: High-quality images showing different angles and uses of the product.
  • Pricing information: Your selling price and any shipping costs if applicable.

To add your product listing, log into the Amazon Seller Centre and go to the “Inventory” tab. From there, click “Add a Product” and search for your product to see if it already exists in Amazon’s catalogue. If it does, you can select it and add the relevant information.

If you can’t find your product, select “Create a new product listing” and fill out the required fields, including product title, brand, category and product details.

Once you’ve completed these steps, double-check all the product information you’ve entered for accuracy and compliance with Amazon’s policies. If it all looks good, you can submit your product listing for approval. The time it takes for this approval can vary depending on different factors, including the type of product, what category it falls under and the completeness of the listing.

How to price your products

Determine a competitive price for your product. Consider your costs, fees and desired profit margin. If you’re using FBA, set the inventory quantity that you will send to Amazon, or ensure you have enough inventory to fulfil orders if you’re shipping yourself or that your suppliers have sufficient inventory if you’re dropshipping.

To help price your products effectively, here are a few things to consider:

Researching competitor prices

Check the prices of similar products listed by competitors. Remember – looking at Amazon Best Sellers is a good way to research items with high sales values and understand the pricing landscape in your niche.

You should also determine the average price range for your product category, as this will give you a benchmark to work from.

Considering your costs

You’ll need to factor in all costs associated with your product, including:

  • Manufacturing or purchasing
  • Amazon fees (referral, FBA, etc.)
  • Shipping and handling costs (if applicable)
  • Advertising and marketing expenses.

You should also decide on your desired profit margin and make sure your price covers all costs while giving you a reasonable profit.

Choose a pricing strategy:

Some useful examples of pricing strategies include:

  • Cost-plus pricing: Add a markup to your total costs to set your price. This is a straightforward approach but may not always align with market conditions.
  • Competitive pricing: Adjust your price based on competitor pricing to remain competitive. You may choose to price your product slightly lower or match the market price.
  • Dynamic pricing: Use tools that allow for automated price adjustments on competitor prices, demand fluctuations and other market factors. This can help you to optimise your pricing in real-time. Some useful tools include Amazon’s Automate Pricing, RepricerExpress and Informed.co.
  • Promotional pricing: Consider offering introductory prices, discounts or special promotions to attract initial sales. This can help boost your products’ visibility and customer reviews.

Monitor and adjust regularly

Regularly monitor and adjust your prices to maintain a competitive edge. It’s important to consistently review your sales data and pricing strategy. If you notice your sales slowing down, it might be time to reassess your pricing structure or explore new marketing strategies to improve your visibility and attract customers. Analysing metrics like conversion rates, customer reviews and inventory turnover can give you useful insights into how your pricing is affecting sales.

Additionally, make sure to stay informed about market trends, seasonality and competitor pricing. This will allow you to adapt your pricing strategy to respond to shifts in demand or market changes. Whether it’s adjusting prices based on seasonal fluctuations or taking action when competitors change their pricing, being proactive in your approach will help you remain competitive and maximise your sales potential on Amazon.

Can I sell internationally on Amazon?

You can sell internationally on Amazon to expand your business and reach more customers. Amazon also provides you with several tools and programs to help you out. Here’s how it works:

Amazon global selling program

Amazon Global Selling allows you to sell your products on Amazon marketplaces in different countries, such as countries in Europe, as well as the US, Canada, Japan and more. 

You can easily manage your international listings through your Amazon Seller Central account and choose which countries you want to sell in. Here’s how it works:

1. Setting up international listings: You’ll need to create product listings in the target country’s marketplace. For example, if you want to sell products on Amazon France, you’ll need to translate your product descriptions to French and ensure compliance with local regulations. Amazon’s Build International Listings (BIL) tool can help you in this process by allowing you to replicate your listings across different countries and adjust the prices automatically based on currency rates and fees.

2. Choosing fulfilment options: If you’re using Amazon’s FBA service, you can use its FBA Export, where Amazon handles international shipping for you. Alternatively, if you prefer to manage your own shipping, you’ll need to arrange for international shipping and handle customs and import duties.

3. Understanding customs and taxes: Selling internationally involves dealing with customs, duties and taxes. Each country has its own regulations surrounding this, so it’s important to familiarise yourself with the tax implications and customs requirements for the countries you want to sell in. For example, in European countries, you’ll need to consider value-added tax (VAT) when selling across borders.

4. Considering currencies: While Amazon supports currency conversions, it’s important to be mindful of exchange rates when setting prices for international customers. Amazon’s Currency Converter tool allows you to receive payments in your local currency, even when selling in other countries.

The benefits of selling internationally

  • Increased market reach: Opens up new markets and gives you access to millions of additional customers.
  • Diversified sales: Selling in multiple countries helps you diversify your revenue stream. So if sales are slow in one region, you might see higher demand in another.
  • Access to Amazon’s global infrastructure: Amazon’s vast fulfilment network and logistical support make it easier for small businesses to sell globally without dealing with the complexities of international shipping on their own.

How do I get paid selling on Amazon?

Amazon transfers payments to your bank account via an electronic funds transfer. For each payment, this typically takes up to five working days for the money to reach your account, from when Amazon initiates payment.

You must provide a valid bank account as your deposit method in your seller account settings. Keep in mind that you can’t receive payments into online systems such as PayPal – if you try to do this, you won’t get paid. To view your orders and transactions, simply:

  1. Go to Amazon Payments
  2. Select “Your Account” at the top of the page and log in to your business account
  3. On the overview page, you can see your account balance and activity

If you need to view a specific transaction, you’ll need to set the date range, click “View” and then “Details” to see the transaction ID and payment method.

What are the benefits of selling on Amazon?

Selling on Amazon is beneficial for businesses wanting to expand their reach and attract a large customer base. The key advantages include:

Access to a huge customer base and global selling opportunities

Amazon has hundreds of millions of customers. Selling on the platform allows you to reach a global audience, giving you access to buyers in multiple countries without the need for your own extensive marketing efforts. Its global selling program also lets you sell in different countries and open up new revenue streams, plus the opportunity to build a global business.

Established trust and credibility

Amazon generally has a good reputation for being a trusted platform, so it’ll give your products good credibility. Many customers feel more comfortable purchasing from Amazon than lesser-known websites, with 70% of UK shoppers using it once a month and 17% using it weekly.

Fulfilment by Amazon (FBA)

The beauty of Amazon’s FBA program is that you can store your products in Amazon’s fulfilment centres, and they’ll handle the logistics for you. This simplifies the selling process, eases your workload and allows for faster delivery, including Amazon Prime shipping.

Scalability

Selling on Amazon makes it easier to scale your business. You can start with a few small products and gradually expand your product range as your business grows. Its infrastructure and resources enable you to manage higher order volumes without the need to invest heavily in your own logistics or customer support.

Marketing and advertising tools

Amazon also offers a good range of marketing tools, such as Sponsored Products, Sponsored Brands and Amazon Stores to help increase your product visibility and boost sales. These pay-per-click (PPC) advertising options will help you target relevant customers and drive more traffic to your product listings.

Quick set up

Starting your business online can be a long process as it requires building a website, setting up payment gateways and managing shipping and customer services. With Amazon, this process is simplified as it provides a ready-to-use platform with built-in infrastructure, making it easier for small businesses and new sellers to get started quickly.

Good analytics and reporting tools

Amazon Seller Central provides you with detailed analytics and reporting tools, giving you quick access for tracking sales performance, customer behaviour and advertising effectiveness. In turn, this data can help you make informed decisions about pricing, inventory management and marketing strategies

Conclusion

Selling on Amazon can be a highly profitable venture, but even with its huge customer base, you can’t just stick your products on there and expect to get sales immediately. Careful planning and strategy are needed, and as competition can be intense, Amazon’s fee structures, advertising costs and strict policies can impact your profit margins if not managed properly.

That’s why conducting market research, optimising product listings and regularly monitoring performance metrics are essential to succeed. Moreover, by utilising Amazon’s tools and resources while adapting to market changes, you can effectively tackle challenges and build a sustainable and successful business.

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Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

Finding a joint venture partner

Written by
Published on 12 January 2012

Are you wondering how to find a business partner? To find a match made in corporate heaven, you have to conduct rigorous research, work out what you can and can’t afford to give away, and personalise everything you write. Locating a suitable partner is only the beginning of the process – it doesn’t end until the ink is dry on the contract.

Here are six steps to creating a stable, successful and symbiotic joint venture:

  1. Look for joint venture partners

    Whether you’re looking to partner with a company or individual, there are plenty of places to search. Take a look at our guide on how to search and find a business partner for detail, but in summary these could include:

    • Existing contacts. You could save yourself time and money by partnering with an existing contact such as a supplier, customer, investor or simply someone you’ve met socially. Look through old invoice files and contacts books to get started.
    • Trade shows. These events provide a panoramic view of your industry, and give you insight into how potential partners present themselves, handle clients and pursue new business.
    • Search engines.  For best results, make sure you type in the sort of keywords you’d use to describe your own business, or those specific to the type of company you’d like to partner with.
    • Social media. Look for companies which follow you, add you as a friend or visit the same pages as you. They may well share your interests and objectives.

  2. Come up with a list of joint venture partners

    Draw up a ‘wish list’ of companies you’d like to partner with. listing the pros and cons for each one.

  3. Rank your joint venture partners

    Come up with a ranking system for the companies you’ve listed, with the ones you’d most like to work with at the top.

    There are several criteria on which you can base your ranking. These include the company’s market share and brand reach, its growth potential, its reputation and customer base, and your personal experience of dealing with the managers.

  4. Conduct due diligence on potential joint venture partners

    Before you approach a prospective joint venture partner, due diligence is crucial. Many companies publish key financial data on their site, so you may be able to download the latest set of accounts, and you may even wish to sign up to newsletters and e-mail alerts too.

    When you’re examining a company’s own literature, look at how they present themselves. Is their website up to date? Is their correspondence professional? Are they punctual in handling enquiries? If they can’t promote their own business effectively, chances are they won’t be able to promote a joint venture either.

    Once you’ve exhausted all the relevant website information, you can visit the Companies House Register, which provides up-to-date information on all UK limited companies. You can search the basic information free of charge, or download an in-depth company report  for just £1.

    Finally, a quick Google News search should bring up all the latest stories about your potential joint venture partner. If they’ve got any skeletons in their cupboard, you should be able to find out here.

  5. Work out your pitch

    If you want someone to partner with you, you need to make them an enticing offer. The content of the offer should be tailored to the company you’re approaching. You may choose to offer knowledge, customer contacts, equipment or product secrets – whatever you think will benefit your target partner.

    When you come to draft the proposal, it never hurts to add some personalised flattery – point out some of the good things you’ve noticed about their website, or positive references they’ve received from others. Make sure you clearly state your aims and objectives, and, if you’ve noticed they favour particular keywords or phrases in their own literature, make sure you weave them into your offer document.

  6. Draw up an agreement

    If the prospective joint venture partner accepts your offer, you’ll need to draw up an agreement. This must include a raft of details, including the legal status of the joint venture (whether it will be run as a separate company), the key aims and objectives, each party’s stake and investment, the structure and make-up of the management team, and plans for a future exit, if applicable.

    Finally, it’s crucial you include details of any non-disclosure agreements – if you don’t want a particular secret going public, make sure you’re clear on this from the outset.

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

13 ways to fund your business (without a bank loan)

A bank loan might be the obvious choice, but there are plenty of other ways to fund your business. Here’s what you need to know.
Cash
Written by
Published on 12 January 2012

As many startups will tell you, getting a bank loan to expand your business can be tricky, especially if you don’t have much trading history.

Luckily, there are plenty of other options out there, and thousands of UK entrepreneurs are looking for alternative sources of finance to get their business going.

In this article, we’ll explore 13 popular alternative funding options – from crowdfunding and grants to angel investment and community schemes – to help you find the right fit for your business.

Key takeaways

  • Understand the risks that come with your chosen funding options. This includes high interest rates, giving up ownership and repayment schedules. Think about how these factors will impact your cash flow, control, and overall business health.
  • Make sure the option you go for aligns with your business goals and vision – whether it’s growth, sustainability, or keeping full control of your business.
  • Avoid overborrowing or giving away too much equity. Over-leveraging can put you at financial risk, and giving up too much equity can limit your ability to make decisions and scale your business.
  • Make sure that your funding options won’t stretch your cash flow too thin. Having a plan for managing expenses, repayments, and reinvestment will help keep things running smoothly.

The funding options we'll cover are:

1. Personal savings

If you have cash sitting in your savings account, this is an easy way to give your business a head start without taking on debt. You won’t have to worry about interest payments or strict repayment schedules, allowing you to focus entirely on your business.

The pros and cons of using personal savings

As there’s no debt involved, you’ll have the freedom to start your business and build on it without the pressure of owing money. You can also retain full control over your business with no external investors to answer to, and the funds are readily available without needing to go through the time-consuming process of paperwork or approvals.

On the other hand, there’s the risk of losing your savings if your business doesn’t succeed, and the amount you have may not be enough to fund large-scale growth. Moreover, the emotional pressure of using your own money can be stressful, as the financial outcome is directly tied to your personal wealth.

Pros
  • No interest or repayments
  • Full control over your business
  • Quick access
  • No paperwork needed
Cons
  • You risk losing your savings
  • You may not have enough to fund large-scale growth
  • Emotional pressure
Important considerations for using personal savings

  • Protect your personal finances: keep enough savings for living expenses and emergencies
  • Understand the risk: remember that your savings could be lost if the business doesn’t succeed
  • Plan for growth: make sure your savings can sustain the business until it’s profitable
  • Consider the long-term impact: think about how using your savings to fund your business may affect your retirement or other financial goals

2. Family loans

Another straightforward option is to ask family members or close friends for financial assistance. They may be more willing to help, and unlike a traditional bank loan, you might be able to negotiate more flexible terms, such as lower (or no) interest rates, or longer repayment periods.

The pros and cons of family loans

Agreeing on more generous terms with your friend or family member can help ease the financial burden on you, and you’ll likely have quicker access to funds with fewer restrictions or red tape involved. Moreover, family and friends will be much more invested in your success and genuinely want to see your business thrive.

However, money can complicate personal relationships, especially if your business faces financial difficulties, which could lead to tension or misunderstandings. There’s also the risk of resentment if there’s no formal agreement laid out, and the emotional pressure of not wanting to let them down can weigh heavily on you as you work to make your business succeed.

Pros
  • Flexible terms
  • Quick access to funds
  • Supportive backers
Cons
  • Risk of complicating relationships
  • Risk of resentment (without a formal agreement)
  • Emotional pressure to succeed
Important considerations when agreeing to a family loan

  • Set clear terms: this includes specific loan amounts, interest rates, and repayment schedules to avoid any misunderstandings
  • Have a written agreement: put everything in writing – even if it’s informal – to keep things professional and to protect both parties
  • Be realistic with repayments: make sure the repayment schedule is something you can realistically stick to, so you don’t risk damaging your relationship
  • Be transparent: keep your family member/friend informed about the progress of your business and any changes to your financial situation
  • Don’t overborrow: only borrow what you really need and avoid borrowing more than you can afford to repay, as this may cause stress later down the line

3. Investors

These are individuals or entities that provide capital to a business in exchange for ownership equity, debt or other financial returns. They also help businesses grow, expand, or launch by offering funds in areas like research and development (R&D), marketing or operational costs.

There are many different kinds of investors out there, but for small businesses and new startups, the main options are:

  • Angel investors: individuals who invest their personal money into startups or early-stage businesses. In return, they often take an equity stake or convertible debt. Most angel investors also offer mentorship and advice.
  • Venture capital (VC) firms: professional investment firms or individuals who invest large sums of money in a business, typically in exchange for equity. They usually target high-growth businesses with significant potential but also higher risks.

The pros and cons of investors

Investors can give your business the cash boost it needs to grow or get started without the stress of paying back loans. Plus, investors often bring valuable experience, advice, and networking opportunities that can help you avoid common mistakes and make the best decisions. They can also add credibility to your business, making it easier to attract more investment later on.

While investors can offer significant funding to your business, this often means giving up some control over your business, as equity gives them a say in key decision-making. This can lead to disagreements if your vision doesn’t match theirs, and as investors expect a return on investment (ROI), there’s pressure to grow quickly and hit financial targets. 

There’s also the risk of equity dilution, meaning the more investors you bring in, the less of your business you own, which can limit your influence over time.

Pros
  • Access to capital
  • Offer valuable experience, advice and connections
  • Adds credibility to your business
Cons
  • You give up full control of your business
  • Pressure to meet an investors' ROI expectations
  • The risk of equity dilution
Important considerations for working with investors

  • Control vs capital: decide how much control you’re willing to give up. Venture capitalists may want a say in business decisions, while angel investors might be more hands-off
  • Business stage: for example, angel investors might be more suited for early-stage companies, while venture capital is often a better fit for businesses that are ready to scale quickly
  • Growth expectations: understand the level of growth your investor expects. Some investors want quick, high returns, while others may be more patient
  • Long-term relationships: an investor can also become a long-term business partner. Make sure you’re comfortable with the person or firm, as you may need to work closely with them for years
  • Investor expertise: it’s not all about money. Make sure to check whether the investor has industry knowledge, experience or connections that can help you succeed
  • Exit strategy: think about how and when you plan to exit the business. Some investors may expect you to sell or go public in a certain timeframe, so it’s important to align on your exit strategy
  • Impact on business culture: make sure your investor’s style aligns with your company culture and the values you want to build in your business

4. Bank overdrafts

A bank overdraft allows a business to withdraw more money from its bank account than it currently has available, up to a set limit. The bank sets a maximum overdraft limit based on certain factors (such as the business’s financial health and credit history). From there, the business is expected to repay the overdraft as soon as possible, often with interest on the amount used.

The pros and cons of bank overdrafts

A bank overdraft gives you quick and easy access to funding, making it ideal for covering short-term cash flow issues or any unexpected expenses. It also offers flexibility as you only pay interest on the amount you’ve overdrawn, and as there’s no fixed repayment schedule, you can repay when it fits your cash flow.

But similar to a bank loan, business overdrafts often come with high interest rates on the amount you’ve overdrawn, which can mount up if not managed well. There may also be fees for using or exceeding your overdraft limit, and if not handled carefully, it can lead to a cycle of debt that’s hard to break.

Pros
  • Quick and easy access to funding
  • You only pay interest on the amount you've overdrawn
  • No fixed repayment schedule
Cons
  • High interest rates
  • Extra fees if you use or exceed your overdraft limit
  • Risk of debt cycle
Important considerations for using your overdraft

  • Repayment ability: make sure you can repay the overdraft quickly to avoid accumulating high interest and fees
  • Interest rates: check the interest rates and any additional fees for using the overdraft
  • Overdraft limit: understand the limit the bank sets and whether it’s enough to cover your short-term cash flow needs
  • Cash flow management: only use an overdraft for short-term gaps in your cash flow, as relying on it long-term can lead to financial strain

5. Business grants

Business grants are funds provided by governments, foundations or other organisations to support businesses in specific industries, regions or sectors. Unlike a bank loan, grants don’t need to be repaid, making them a great option for businesses that need funding but don’t want to face the pressure of repayments.

The pros and cons of business grants

Aside from not having to pay the money back, grants are also useful for funding specific projects, such as launching a new product or expanding the business. Moreover, getting a grant can make your business look more credible, which could attract future investors or partners.

But like with most things, there’s a catch. For one, applying for grants can be time-consuming, as you’ll need to put together a lot of paperwork (including your business plan) and compete with other businesses. Also, grants are often only available for specific uses, so you might not have the same kind of flexibility you’d have with other types of funding.

Pros
  • No repayment needed
  • Good for funding specific projects
  • Can make your business look credible
Cons
  • A lot of paperwork required
  • Very competitive
  • Only available for specific uses
Important considerations when applying for business grants

  • Eligibility requirements: Each grant has different rules (e.g. industry, location or size of business), so make sure your business fits the criteria
  • Purpose of funding: understand exactly what the grant’s purpose is. For example, funding innovation, research or job creation
  • Competition: as grants are highly competitive, many businesses are likely to apply for the same funding. Make sure to have a backup plan in case you don’t get it
  • Conditions and restrictions: grants usually come with conditions on how the money can be spent, so make sure these align with what your business needs
  • Size and scope: determine whether the amount of money you receive is enough to make a real difference for your business and if it’ll cover the project or expenses you need to fund

6. Invoice finance

Invoice financing is a way for businesses to get quick cash by using their unpaid invoices as collateral. In other words, it’s a short-term funding option where a business sells its outstanding invoices to a lender at a discount, in exchange for immediate cash. The lender then collects payment from the business’s customer when the invoice is due.

There are two types of invoice financing – invoice factoring and invoice discounting. Invoice factoring involves the lender taking responsibility for collecting payments from customers. On the other hand, invoice discounting means the business retains responsibility for this, but still gets the cash upfront.

The pros and cons of invoice finance

Invoice financing provides quick access to cash without taking on any long-term debt, which can be a lifesaver if you need funds urgently. It’s especially helpful for managing cash flow gaps, particularly when your customers are slow to pay their invoices. Additionally, it doesn’t require long-term commitment, making it a flexible solution for businesses in need of quick cash.

The main downside is that the fees can be quite high, depending on the size of the invoice and the financing provider you choose. If you opt for invoice financing, your customers may be aware of the arrangement, which could affect your business relationships. Plus, even with financing, you may still be held responsible for the full invoice amount if the customer doesn’t pay, adding risk to the process.

Pros
  • Quick access to cash with no long-term debt
  • Helps manage cash flow gaps
  • Doesn't require long-term commitment
Cons
  • Can come with high fees
  • Risk of harming customer relationships
  • You may be held responsible if a customer doesn't pay their invoice
Important considerations for using invoice financing

  • Cost of financing: make sure you understand the fees and interest rates involved, as they can be quite high depending on the lender and invoice amount
  • Repayment terms: check the repayment terms, including how quickly the financing company will expect you to pay them back after receiving your customers’ payments
  • Impact on cash flow: while invoice financing can help with instant cash flow gaps, you should consider whether these fees and the money you owe could affect your future cash flow
  • Customer reliability: since this type of financing relies on customers paying their invoices, you’ll need to determine whether yours are reliable payers. If they tend to pay late or have a history of non-payment, this may not be the best option for you

7. Community schemes (CDFIs)

Community schemes, or Community Development Financial Institutions (CDFIs), specifically provide financial services to businesses and individuals in underserved communities. These institutions are focused on supporting local development, helping to create jobs, improving infrastructure and boosting economic growth in areas that might not be served by traditional banks or lenders.

The pros and cons of CDFIs

As well as offering capital to underserved communities and focusing on improving the local economy, CDFIs offer lower interest rates and longer repayment periods, making it easier for businesses to manage.

That said, CDFIs aren’t available everywhere as they’re usually smaller, so not all businesses can access them. They also have strict criteria to meet, like having a solid business plan or offering collateral. Additionally, the loan amounts are often smaller compared to traditional bank loans, which may not be enough to fund bigger projects.

Pros
  • Offers capital to underserved communities
  • Helps improve local economy
  • Lower interest rates and longer repayment terms
Cons
  • Not available everywhere
  • Strict regulations
  • Loan amounts are often small
Important considerations for CDFIs

  • Location: check if there’s a CDFI available in your area before considering this option
  • Eligibility: make sure your business meets the CDFI criteria, such as providing a business plan or evidence of community impact
  • Funding needs: think about whether the loan amount will be enough to fund your projects
  • Terms and conditions: while CDFIs offer more flexible terms, it’s still important to understand interest rates, repayment schedules and any restrictions on how the money can be used

8. Crowdfunding

Crowdfunding has become a popular means of funding for small businesses, with 2,514 UK companies securing equity crowdfunding between 2014 and 2024 across 4,254 funding rounds. Put simply, crowdfunding allows businesses to raise money from a large group of people, usually via online platforms like Kickstarter and Indiegogo, by offering rewards, equity or pre-selling products.

The pros and cons of crowdfunding

Crowdfunding provides access to capital without the need for traditional loans or investors, so it’s a good way for small businesses and startups that may struggle to secure funding through these methods. 

It also offers a good level of exposure and marketing opportunities, as running a crowdfunding campaign can help raise awareness and attract potential backers who validate your business idea. Plus, you can get flexible options for how to structure the funding, whether it’s through rewards, equity or donations.

That being said, crowdfunding takes a lot of time and effort, as you’ll need to create a compelling business pitch, promote the campaign and keep backers engaged. There’s no guarantee for success either, and if your idea ends up failing, it could hurt your reputation. 

Crowdfunding platforms also take a cut of the funds raised, and if you offer rewards or equity, managing a lot of backers can be tricky, as you’ll need to keep them updated and meet their expectations.

Pros
  • Access to capital without loans or investors
  • Offers good marketing opportunities
  • Flexible options on funding structure
Cons
  • Takes a lot of time and effort
  • No guarantee of success
  • Crowdfunding platforms charge fees for the funds raised
  • It can be difficult to keep up with expectations from backers
Important considerations for crowdfunding

  • Marketing and outreach: think about how you’ll reach your target audience – this could be through social media, email marketing, or even reaching out to influencers
  • Setting a realistic goal: make sure your funding goal is realistic. Overestimating can make it harder to reach your target, while underestimating could leave you short of what you need
  • Rewards and expectations: if you offer rewards, make sure you can follow through on your promises. Failing to do so can harm your reputation
  • Platform fees: remember that crowdfunding platforms typically charge fees for hosting your campaign (usually a percentage of the funds raised)
  • Legal and financial requirements: check these requirements, especially if you’re offering equity or running a large campaign. There may be regulations or taxes to consider

9. Business cash advance

A business cash advance – also called a merchant cash advance – is when a lender provides a lump sum payment for a portion of your future sales and revenue. These aren’t based on your credit score – rather, the strength of your business’s daily or monthly sales. The repayment amounts are typically flexible and are adjusted based on your sales volumes.

The pros and cons of business cash advances

Business cash advances are another good way to get quick access to cash. Repayments being based on sales means that they’re adjusted accordingly, helping to ease cash flow pressures. There’s also no collateral required, the approval process is much quicker as it isn’t based on your credit score, and there’s no fixed term for repayments.

On the flip side, business cash advances often come with high costs, as the interest rates and fees are usually much higher than traditional loans. The daily/weekly repayments can also eat into your cash flow if you experience a dip in sales. Moreover, it’s easy to fall into overborrowing as the repayments are tied to sales, so you might find yourself taking out more than your business can afford to repay.

Pros
  • Quick access to cash
  • Repayments are solely based on sales
  • No collateral required
  • Quick approval process
  • No fixed repayment schedule
Cons
  • High interest rates and fees
  • Daily/weekly repayments can mount up
  • Risk of overborrowing
Important considerations for business cash advances

  • Understand the total cost: make sure you know how much you’ll be paying back in total, not just the percentage taken from sales
  • Know your sales patterns: if your revenue fluctuates a lot, repayment amounts will too. This might cause issues during quieter periods
  • Compare providers: different lenders offer different terms, fees and repayment structures, so it’s worth shopping around to find what works best for you
  • Don’t overborrow: just because you’re approved for a large advance doesn’t mean you should take it. Only borrow what you truly need and can afford to pay
  • Read the fine print: watch out for hidden fees or tricky terms in the contract. Make sure you know exactly what you’re signing up for

10. Asset finance

Asset finance is a pretty broad category that covers lots of different types of lending. However, in most cases, businesses use this option to lease expensive equipment – such as vehicles, machinery or technology – and spread the cost over time. This option is ideal if you need essential gear to grow your business but don’t want to fork out on a huge amount upfront.

The pros and cons of asset finance

Asset finance lets you easily spread the cost of big purchases. Moreover, asset finance can be more accessible compared to traditional loans, especially if you don’t have much trading history or a strong credit score. It also gives you up-to-date equipment, depending on the agreement you have with the lender.

The main downside is that you don’t own the asset straight away, and in some cases, you might never own it unless you pay the final lump sum. Plus, if you factor in the interest and fees, you may find yourself paying more than if you’d bought the item outright. There’s also the risk of being tied into long contracts, which might not work in your favour if your business needs change or you no longer need the asset.

Pros
  • Spread the cost of purchases
  • More accessible than traditional loans
  • Can provide up-to-date equipment
Cons
  • You don't fully own the asset
  • You may end up paying more if you have high interest
  • The risk of being tied into long contracts
Important considerations for asset finance

  • Do you really need to own it? If you only need the asset short-term, leasing might make more sense than buying
  • Can your cash flow handle it? Make sure you can afford regular payments, even during slower periods
  • What happens at the end? You should find out whether you’ll own the asset, return it, or need to make a final payment to keep it
  • Is the asset essential? Only use asset finance for something that’s really going to add value to your business

11. Peer-to-peer (P2P) lending

This is a way for businesses to borrow money directly from individual investors, without going through a traditional bank. It usually happens through online platforms that match up businesses with people who want to lend their money in exchange for interest. You apply on a P2P platform, your business gets assessed, and if approved, investors chip in to fund your loan. From there, you repay the loan (plus interest) over time, just like you would with a regular loan.

The pros and cons of P2P lending

The application process is usually quicker and more straightforward, with faster approval times. Many platforms also offer flexible terms and loan sizes, so you can tailor the loan to your business needs. Also, if you have a strong credit history, you might even find interest rates that are lower or more competitive than what a bank would offer.

Still, P2P lending isn’t without its downsides. If your credit score isn’t good, the interest rates can be much higher, making it a more expensive way to borrow. P2P platforms don’t always offer the same level of protection or support as traditional lenders, and you might come across extra fees (for example, arrangement or early repayment charges). You’re still taking on debt as well, so you’ll have to make sure your business can handle the repayments.

Pros
  • Quick and easy application process
  • Faster approval times
  • Flexible terms and loan sizes
  • Lower interest rates (if you have a good credit score)
Cons
  • High interest rates (if you don't have a good credit score)
  • P2P platforms aren't as secure as traditional lenders
  • You're still taking on debt
Important considerations for P2P lending

  • Check the interest rate: this can depend on your credit score, so make sure it works for your budget
  • Watch out for fees: this includes setup, admin or early repayment charges.
  • Review the platform: make sure the platform you’re using is reputable and regulated, ideally by the UK’s Financial Conduct Authority (FCA)
  • Know your repayment terms: make sure you understand how much you’ll pay back each month and how long the loan lasts
  • Treat it like any other loan: just because it’s peer-to-peer doesn’t mean it’s casual – it’s still a formal financial commitment

12. Bootstrapping

Put simply, this is when you fund your business using your own money, without relying on outside investors, loans or other forms of external funding. It’s all about building your business from the ground up with any resources you already have, such as personal finances (this can include using your own savings, which we’ve already covered), and investing any profits your business makes back into it.

The pros and cons of bootstrapping

The most obvious advantage of bootstrapping is that you maintain full control over your business, meaning you get to make all the decisions without having to meet expectations from investors or lenders. There’s also no debt to worry about as there are no repayments to make, and you’ll have more flexibility to change your business model without needing approval from anyone else.

However, there is still financial risk involved, as you risk losing out significantly if your business fails. Growth can also be slower as you might not have enough capital to scale quickly or invest in larger projects, and the limited funds mean it’ll be difficult to afford things like important equipment, hiring a team or marketing your business as effectively as you’d like. Moreover, managing both your personal and business finances can be stressful, especially when things get tight.

Pros
  • You get full control of your business
  • No debt involved
  • Freedom to change your business model
Cons
  • Risk losing money if your business fails
  • Slower growth
  • Limited funds for equipment, hiring or marketing
  • Managing both personal and business finance can be stressful
Important considerations when bootstrapping

  • Financial readiness: make sure you have enough money to fund your business, and you’re comfortable taking on that financial risk
  • Growth strategy: bootstrapping might slow you down if you’re looking to grow fast. Think about whether you’re okay with scaling at a slower pace or if external funding would better support your goals
  • Business model: some businesses, especially in industries that require heavy upfront investment, may not be suited for bootstrapping. Make sure your business model can support gradual growth
  • Your workload: bootstrapping often means wearing multiple hats and doing a lot by yourself. You’ll need to be prepared to take on a lot of responsibility in the early stages

13. Business credit card

Much like a regular credit card, a business credit card allows you to borrow money up to a certain amount to make purchases. However, the main difference is that it’s specifically designed for business-related expenses, offers higher credit limits, and offers separate expense tracking and spending rewards. 

The pros and cons of credit cards

A business credit card gives you access to instant credit, helping you manage short-term cash flow needs or any unexpected expenses. They also keep your personal and business finances separate, which is useful for bookkeeping and tax filing. Many cards come with rewards and perks for spending (such as cashback and purchase protection), and using them responsibly can help build your business credit history.

On the other hand, business credit cards often come with high interest rates. Some charge extra fees (for example, annual fees, foreign transaction fees or late payment fees), while others may require a personal guarantee, meaning you’ll be fully responsible for the debt if your business is unable to pay. Having access to credit might also lead to the temptation to overspend, and the credit limits may not fully cover what your business needs.

Pros
  • Access to instant credit
  • Keeps personal and business finances separate
  • Some credit cards offer perks and rewards
  • Helps to build your credit history
Cons
  • High interest rates
  • Extra fees (e.g. annual or late payment fees)
  • A personal guarantee may be required
  • Risk of overspending
  • Credit limit may not cover expenses
Important considerations for choosing a business credit card

  • Interest rates: make sure you understand the interest rate, as this can quickly accumulate if you don’t pay off the full balance every month
  • Fees: check for hidden fees (such as annual fees or late payment fees), as these can also add to your debt
  • Credit limit: consider whether the card’s credit limit is enough to cover your business needs, especially if you anticipate large purchases or significant cash flow gaps
  • Reward schemes: if you plan to use the card frequently, look for a card with a rewards scheme that aligns with your business spending (like cashback)
  • Payment terms: review the repayment terms and make sure they fit with your business’s cash flow cycle. For example, a card that offers flexible payment options could be beneficial for managing expenses

Funding your business: best practices

Choosing the right funding option can make a big difference for your business’s success – whether you’re just starting out or looking to grow.  But with so many options out there, it’s important to know what works best for you. Here are some practices you should consider before making that all-important decision.

Figure out how much you need

First thing’s first, you’ll need to know exactly how much cash you need and what it’s for. For example, are you covering startup costs, trying to manage cash flow, or looking to expand? Knowing this will help you choose the right way to fund your business. Remember to be realistic about your needs and to account for any unexpected expenses that may come along the way.

Create a solid business plan

A good business plan is essential for attracting investors or lenders. Make sure your goals, financial forecasts, and how you plan to use the money are clear. It will also help you stay focused and give you something to measure your progress against as your business grows.

Need help? Check out our guide to writing a business plan for everything you need to know.

Mix up your funding sources

Don’t put all your eggs in one basket. Depending on what you need, you could consider a mix of funding options, like business loans, grants, investors or crowdfunding. A combination can help spread out the risk, and having multiple sources can offer more flexibility and help you take advantage of different benefits (such as lower rates or longer repayment terms).

Stay on top of your cash flow

Managing your cash flow is super important for maintaining a good profit margin. If you’re borrowing money or have funds from investors, you’ll need to make sure you can pay them back. Therefore, you should keep a close eye on your financial health to avoid any surprises. You should also use a good-quality accounting software to track your expenses, income and any upcoming payments or debts.

Seek professional advice

Before you commit to any funding options, consider talking to a financial advisor or accountant. They can help you figure out the best choice for your business and avoid mistakes down the road. Moreover, a good advisor can help you understand tax implications, legal considerations, and give you a better picture of your business’s financial health.

Summary: is it right for you?

Choosing the right funding option largely depends on your business’s specific needs and goals. 

Therefore, you should consider the purpose of the funding, how much risk you’re comfortable with, how quickly you need the money, how much control you want and what you can afford long-term.

Once you’ve determined this, you’ll have a better idea of which option makes the most sense for your business right now. It isn’t something you should jump into, so take your time, weigh the pros and cons and go with what matches your business’s mission and vision for the future.

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

What UK businesses need to know about Capital Gains Tax (CGT)

Find out what capital gains tax is, how it could affect your business, and what the rates, allowances and exemptions are.
Written by
Published on 12 January 2012

Capital gains tax (CGT) is a tax on profits made from the sale or disposal of qualifying assets. CGT events need to be reported to HMRC separately as the tax is not automatically deducted when doing a tax return.

Business owners need to understand the business tax rules for CGT, what it is, when it could apply to them, and how to comply with the rules and account for it as it is likely that you will need to sell or dispose of assets that will trigger a CGT event as your business grows.

It can apply to individuals when they dispose of assets such as buy-to-let property. It’s important to note that businesses don’t pay CGT. It will only apply to sole traders or those in a partnership, not businesses set up as a limited company who pay corporation tax on profits made from the disposal of business assets.

This is because there is no legal distinction between an individual and their business, so any capital gains made through the sale of shares for instance, are  the business owners’ or partners, so the gains will need to be included as part of the owners’ self-assessment tax return.

This article will cover:

Why do you need to know about Capital Gains Tax?

You need to know when CGT may impact your business, and how the latest government legislation could affect things.

Those liable for CGT pay tax on the amount of profit they make, not the total sale value. For instance, if a sole trader bought a business premises for £300,000 and sold it for £415,000, the CGT liability payable would be the difference, so £115,000.

Disposing of an asset can mean gifting it, swapping it with someone else for another asset or receiving compensation for it, such as via an insurance payout. If you give away an asset or sell it for less than it’s worth, CGT is based on the market value of the asset at the time of its disposal.

What assets can trigger CGT?

You may be liable for CGT if you sell or dispose of chargeable assets including:

  • Company shares
  • Plant and machinery
  • Registered trademarks
  • Land and buildings
  • Fixtures and fittings
  • Cryptocurrency gains
  • Your businesses’ reputation or ‘goodwill’

How does it affect businesses?

CGT applies to individuals who sell or dispose of fixed assets whilst operating within a company structure. Fixed assets have a longer life than a business’ current assets. They retain value so when they are sold or disposed of the profits could be liable for CGT.

Current assets are generally used up within a year and form part of the trading expenses of a business. If they are sold, they will be included as income in a company’s profit and loss account, with tax paid in the normal way.

Who is liable for CGT?

The budget also included CGT changes to the liability rules for UK resident, non-UK-domiciled individuals, and new arrivals who have non-UK assets or foreign income. 

Previously, the latter had the option to be taxed under the remittance basis and were subject to UK tax on their UK-sourced income and gains, but only had to pay UK tax on their foreign income and gains that are remitted to or used in the UK.

Under the new rules, qualifying new residents will not have to pay tax on their foreign income and gains for four tax years after becoming a tax resident here, regardless of whether or not these funds are brought to the UK.

When is CGT triggered?

Liability for CGT applies when an asset is sold or disposed of. If a sole trader makes the sale or disposal, they are liable for all tax due. For a business partnership, the tax levied on CGT profits from the sale or disposal will be apportioned as per the share each partner has in the partnership.

To understand whether an asset will be triggered for CGT, owners need to know what the asset was used for, as well as the amount it was sold for. For instance, virtually all main private residences are exempt and a private car sold by a sole trader is exempt if the car wasn’t used for business.

Several other types of assets are exempt from CGT when sold or disposed of, including:

  • Gifts to a spouse or civil partner
  • UK government gilts (bonds issued by the government) and premium bonds
  • Gifts to a registered charity
  • ISA investments
  • Competition, betting, lottery, or pools winnings

Government updates to CGT

In the past, the government has changed the individual CGT rate for the sale or disposal of all assets (except residential property).

The basic rate for the sale or disposal of all other assets increased from 30th October 2024 from 10% to 18%. The rate will remain at 18% for the 2026/27 tax year beginning on 6th April 2026.

The higher rate increased from 30th October 2024 from 20% to 24% and will also remain at that level for the 2026/27 tax year.

CGT rates for qualifying residential property disposals remain the same at 18% for basic rate taxpayers, and 24% for higher rate taxpayers.

There are also changes to Business Asset Disposal Relief (BADR) and Investors’ Relief (IR), rising from 14% to 18% for disposals made on or after 6 April 2026.

How do the new rules impact businesses?

Under the new rules, any business that sells a qualifying asset must compare the purchase price and sale income to see if a profit arose on the sale or disposal. Any costs of selling, valuing or advertising an asset for sale and the value of improvements made before selling can be offset.

Taxpayers must then pay CGT at the appropriate rate on the profit amount less their annual exemption allowance.

Changes to CGT rates for BADR could influence business owners who are considering selling their business. The increase in the CGT rate means it will cost more to sell a business from 30th October 2024. Before this date, businesses paid just 10% CGT on the first £1m of gains.

Find out more: what is classified as a qualifying asset for CGT?

Understanding CGT rates and allowances

Following the government’s latest changes, the CGT rate for basic rate taxpayers is 18%. The CGT rate for higher rate taxpayers is 24%.

What this means:

If a basic rate taxpayer makes a profit after allowable deductions of £8,000, they will pay 18% tax on that amount. So, £8,000 @ 18% = £1,440

If a higher rate taxpayer makes a gain of £12,000 after allowable deductions, they will pay 24% tax. So, £12,000 @ 24% = £2,880.

The rates for residential property gains have not changed. The rate for carried interest gains for both basic and higher rate taxpayers will change for 2025/26 from 18% and 28% respectively to 32% for both types.

Annual exempt amount

As CGT is not specifically a business tax, but a tax on individuals and their gains from the sale or disposal of business assets, individuals receive an annual allowance. This allowance remains at £3,000 for individuals. This means if a gain is made of £10,000, a further £3,000 can be deducted so CGT is levied on the lower amount, £7,000.

Business Asset Disposal Relief (BADR)

The other significant change for business owners is changes to the rate of BADR, formerly known as Entrepreneur’s Relief; a form of tax relief.

Business owners have a lifetime limit of £1m in BADR which they can claim over their lifetimes. Currently the rate they pay is 10% CGT on the first £1m of gains. The limit can be higher if any of the assets were held before March 2020, when the lifetime limit was reduced.

Business owners who have maxed out their limit or do not qualify will pay a higher rate from 2025/26 when the rate rises to 14% and then to 18% from 2026 to 2027, the same as the main basic rate for CGT.

The budget included transitional rules to deal with unconditional but uncompleted contracts entered into before 30th October 2024 but not completed by the time the CGT rate changes apply.

In cases involving BADR and IR, where a contract is made from 30th October 2024 to 5th April 2026, and completed from 6th April 2025, disposals will be subject to the new CGT rates in most cases with just two exceptions.

Key considerations for businesses

For SME owners considering an exit, the increase to BADR for the next two tax years is significant. If a buyer can be found, agree a deal and complete all the legal steps by 5th April 2025, sellers could benefit from the 10% rate. Again, it could incentivise others to sell before 5th April 2026, with BADR at 14% before the 18% rate is introduced.

For a business sold for a taxable gain of £2m, the tax liability would be £200,000 if sold in the 2024/25 tax year, but would increase by £80,000 to £280,000 if sold in May 2025, and again to £360,000 if sold in May 2026.

To qualify for BADR, the seller must have owned the business for at least two years up to the date on which the business is sold.

Share disposals

Another consideration for SMEs is share disposals. To sell shares in their own company, an individual must have been an employee, director or company secretary for at least two years and the company must have been actively trading (as opposed to being an investment company).

Selling shares can create a CGT liability. The same principle applies, in that CGT is applied to the profit on the sale of the shares. The rate applied will be either 18% or 24%, depending on whether the person is a basic or higher rate taxpayer.

Property disposals

As noted, CGT does not apply to the sale of an individual’s main residence, unless it’s let out, used for business or very large. It does apply to the sale of second homes and buy-to-let investment properties, business premises, land and inherited property, but the rates were not changed in the Autumn 2024 Budget.

If a CGT liability exists, it may qualify for tax relief if the property was a business asset. Taxpayers should report and pay any CGT on a property disposal within 60 days of the sale. The CGT rate will be 18% or 24% respectively for disposals made on or after 30th October 2024.

What do SMEs do now?

The Autumn Budget introduced changes to the CGT rates for basic and higher rate taxpayers. As of 30 October 2024, they now pay more CGT on profits when they sell or dispose of business assets.

Many business owners will be relieved that one potential measure considered did not materialise and the £1m lifetime BADR limit was not scrapped. There was an increase in both BADR and IR, up from 10% for each to 18% for 2026/27.

Startups and small businesses need to keep updated on changes to CGT and understand the type of business transaction that can give rise to a CGT liability and how to conduct the transaction in a tax-efficient way.

As CGT can be a complex area, it is a good idea to seek professional expert advice from an accountant or tax specialist to ensure your business manages its CGT exposure in a compliant way.

Find out more: UK tax rates and personal allowances for 2024/25

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.

10 top tips for pitching for government contracts

The coalition wants small firms to bid for public sector jobs - and here are some tips to help you take advantage
Written by
Published on 12 January 2012

With the creation of the Contracts Finder, and the creation of Dragons’ Den-style panels, the government is striving to open up the public sector procurement system to small businesses – which means more chance for you to grab a lucrative contract.

However, if you want to get a government project, you’ll have to compete with dozens of like-minded firms, and impress teams of expert procurement agents. To help you do that, we’ve asked a team of experts to give us their top pitching tips. Here’s what they said…

1. Understand what’s involved

It’s crucial that you recognise, right from the outset, that the pitching process can be very time consuming and expensive; if you don’t grasp what the process entails, you probably won’t emerge triumphant.

The Pre-Qualification Questionnaire (PQQ) is still a major factor, as Chris Gorman, of the Forum of Private Business, told us:

“You don’t need to fill out PQQs for contracts worth less than £100,000 for central government work, but that doesn’t mean to say you won’t have to go through the PQQ process for the many other types of public sector organisations, like local authorities or universities, so you have to familiarise yourself with the process. “

2. Know where to look

If you know how to find each of the relevant procurement sites, or, even better, have a personal contact, you should be able to find a contract relevant to you – without forking out money for the privilege.

Chris Gorman continued: “You shouldn’t need to pay for information on available contracts – this should be available for free through a quick search of the relevant government websites like Supply2Gov, Contract Finder and the Official Journal of the European Union.

“But having said that, don’t feel you have to go through these websites if you have a much more direct way of contacting the public body providing the tender.”

3. Review everything

Once you’ve received an application pack or brief, you must review all the terms and conditions to ensure you meet the qualifications before proceeding with any work. Make sure you understand every aspect of the project, down to the tiniest detail.

Michael Parker, founder of Pitchcoach and author of pitchcoach.co.uk, says those pitching for government business should “read the questions asked, and read them again. Answer each question on the assumption it is being separately scored and evaluated. If they have 50 submissions, they’ll be looking for reasons to discard applications, and they will clamp down on you if you’ve overlooked anything. Even basic information, such as where your offices are, is important.”

4. Send a summary

If you’re sending a written pitch, you can really stand out by sending an executive summary, as Michael Parker says:

“You can send an executive summary, even if it’s not asked for; it can be put into the accompanying letter, or e-mail. Typically you’ll be required to fill out four or five pages of terribly formal legalese, and it doesn’t give you the opportunity to put across the three or four key selling points in a punchy, enticing form. An executive summary allows you to do this.”

5. Keep it clear

If you want to win a government contract, you’re going to have to take the time to ensure your submission is clean and clear. Make sure you pay attention to the typography and spacing, to ensure your words have space to breathe and the content doesn’t look squashed or scattered. If they’ve used a particular numbering system, make sure you follow it; if you reflect the style of the people you’re trying to impress, you’re more likely to grab their attention.

6. Check your website

When procurement agents are reviewing your submission, it’s best to assume they will look at your website – if you have one. If they’re seriously considering your application, they’ll want to find out a bit more about your company and the company website is a great place to start.

Make sure your site is clear, informative and up-to-date, and reflects the image you are trying to convey to the procurement team.

7. Be proactive

Once you’ve made your submission, and are waiting to hear whether you’ve won, or been selected for a face-to-face pitch, it never hurts to be proactive.

Michael Parker urges: “If there is any opportunity to ask questions, you really should take it. If you’re the first person to call, the first person to have really intelligent, well thought-through questions, it’ll make a really strong impression. If they have said ‘we will not take questions,’ then don’t do it. But otherwise be as proactive as you can.”

8. Research your audience

If you’re carrying out a face-to-face pitch, it’s vital that you get into the mindset of your audience before you deliver it.

Alan Gleeson, of pitch and business plan advice site bplans.co.uk, says:

“You need to research who the audience will be and think through what their requirements will be so you can ensure you reflect these in your pitch. If you’re a smaller company you’ll want to convey the fact that you have sufficient resources to deliver the contract.”

Michael Parker adds that “the first thing is to understand the battleground. Who are you going to be presenting too? And how many are you presenting too? And where? Are they calling into a great big conference room, are they calling you into a little cubby hole? You can use this information to determine the number of people pitching – you should not outnumber the people receiving the pitch by more than one.”

9. Don’t sell yourself short

According to Alan Gleeson, it’s crucial that you avoid “‘winner’s curse,’ where you win a bid but have under-valued the contract and hence make no money from the deal.”

Don’t undersell yourself. If you don’t value your service, those receiving your pitch won’t either. In many cases, a higher-priced bid emerges triumphant from the pitching process, because the procurement agents recognise that the company behind the bid values its own service, and understands its market worth – and isn’t just trying to provide a cheap option.

10. Get feedback

You’re entitled to feedback from the procurement panel, and you should ask for it – whatever happens.

Even if you don’t win, you can use the feedback to make your written and verbal pitch even stronger for the future.

 

Written by:
Aimee is Startups' resident expert in business tech, products, and services. She loves a great story and enjoys chatting to the startups and small business community. Starting her own egg delivery business from the age of 12, she has a healthy respect for self-starters and local services.
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