“Don’t Bank Money, Bank People

… if you do that, you are going to be much better off.”

This quote doubled as the title of a post I read recently in the Web Worker Daily blog.

Let’s face it, we all dread it. Public speaking. The dreaded sales pitch. We could waste hundreds of £000’s on bad advertising. Alternatively, we could just put ourselves “out there” and network.

I read a few months ago the results of a survey in the business section of the local newspaper, The Argus, that suggested that most business owners in Sussex do not believe that networking can benefit their businesses. This is a shame. Quite simply, if you’re not prepared to put yourself forward, no-one else will.

In essence, a sale is the conclusion of a relationship between two interested parties. Since people still buy from people, the best way to increase the sales revenue of your business is to get out there and network.

In our private lives we do this without thinking: we recommend children’s entertainers, dentists, hairdressers, motor mechanics, restaurants and pubs. We make small talk with the people we queue with in banks. Yet, in a business context we break into a sweat and look for excuses not to participate.

Networking is not about “working a room”. It’s about nuturing and fostering relationships with people who may one day buy from you. It’s about meeting people who, to paraphase an old AA commercial, “know a man who can”. Networking is about people, their interests and their needs.

If nothing else, you will gain new friends and extend your social network.

Companies Act 2006: Part One

The behemoth that is the Companies Act 2006 finally came onto the Statute Books on November 8th 2006 and, at 1,500 clauses long, it’s the largest piece piece of legislation to reach Royal Assent in the UK. Ever.
Assuming that you don’t have time to peruse the document yourself, here’s a brief introduction to the Act.

What’s New?

The Companies Act 2006 reforms and consolidates existing UK Law. It sets out clearly the duties of directors, makes provisions for shareholders to sue directors (under specific circumstances), guarantees new information rights for indirect investors, requires institutional investors to disclose how they exercise their voting rights, forces companies to release details of their suppliers (although it does not call for a full and exhaustive list), and reinforces the concept of “Social Responsibilty”.

How Does that Affect My Business?

Private Limited Companies will no longer require a Company Secretary and there’ll be less formalities for company meetings. For example, an AGM need only be called if the shareholders seek one.

For all incorporated businesses, provisions are made in the legislation to enhance the rights of proxies. Furthermore, under the terms of the Act paper share certificates are consigned to the history books.

Major Changes

Codification of directors fiduciary duties. In plain English, directors need to take on board both the long-term and the short-term interests of the company.

Although the interests of the shareholders remain paramount, Companies Act 2006 establishes that shareholders interests also include the Company fostering and maintaining an appropriate relationship with its employees, customers, suppliers and the community in which it operates.

Confidentially of company directors enhanced: removal of the requirement of a director to disclose home address*.

Control of access to the Share Register

Reform of auditor liabilty coupled with new auditor offences

*It is not clear as yet if this will involve a wholesale “purge” of existing records held at Companies Registry.

Social Responsibilty

The Act is designed to make it more difficult for Companies registered in England and Wales to pass the buck over issues such as pollution, environmental damage and shoddy work practices down the chain of supply. Directors are required also to consider how their decisions affect the interests of the local community, the environment and suppliers.

Finally …

Companies Act 2006 is unlikely to come into force until 2008. Since some aspects of the Law will act as a springboard to further (secondary) legislation, there will be a consultation period before the exact timetable for implemenatation is released.

Don’t be a Tax Turkey

Christmas is a time to give and to party. If you stick to the limits imposed by HMRC, this is one of the few times you can experience a free lunch – for real!

Here’s a brief lowdown on the tax implications for employers (and customers) hoping to spread some Christmas Cheer this year.

Xmas Gifts

Minor gifts such as a turkey, a bottle of wine or a box of chocolates are exempt from tax as long as all employees receive similar items.

Note here the words similar and all. In short, if the business is treating the directors to a weekend Spa break whilst giving the shop floor staff Christmas Puddings, you are breaking the terms of the exemption and the HMRC may regard the Spa Break as a taxable benefit.

Christmas Parties

Parties are not considered a taxable benefit where:

the function is available to the employees generally;
the function is available generally at a particular location (in other words, functions in other parts of the country qualify for the exemption subject to the same monetary limits and conditions);

The limit is £150 per head for the total cost of providing the party (to include transport or accomodation incidental to the event), divided by the number of attendees;

The total cost must include VAT and other costs, such as entertainment;

This exemption can be applied to more than one gathering in one year, but the aggregate cost may not exceed £150 if the full exemption is to be claimed;

VAT is reclaimable on the cost for employees;

Where a charge is made for guests, the VAT on those costs is likewise reclaimable. However, the sum charged for guests is treated as VAT- inclusive and the VAT element will be paid over as output tax.

Note that the key word here is attendee – you can’t claim the exemption for the employees that choose not to attend!

Benefits from Customers/Suppliers

Exemptions are made where:

Entertainment is provided to an employee, or a member of the employee’s family or household where is is provided by a third party not connected to the employer and not procured by the employer;

Company Policy does not prohibit staff from attending the function

A small gift is also exempt as long as it is:

not procured by the employer;

not a reward for a specific service;

limited to £250 and less;

not cash or securities or a voucher that can be converted to cash.

Open Source Software

Over the last year or so I’ve been trying out Open Source Software. Basically, Open Source Software is distributed under a license which makes freely available the code (programming) so that others may contribute to, further develop and improve its functionality.

There are bonuses for us non-geeks, too. Open source material is quite often free or available very cheaply and quite often the multi-user license deals are extremely generous. Probably the best known example here is the GNU General Public License (GPL).

Another highly desirable feature of Open Source is the way in which security is built into the source as the program as its developed, rather than as an afterthought as is often the case with proprietary products.

So what’s the catch? Well, certainly Open Source material is often less-polished than it’s proprietary equivalents and its development is dependant upon the likes of us to report bugs to the developers involved.

However, Open Source Software has moved on considerably and just about everyone with an internet connection will have come across it in some guise or another. The Mozilla Firefox browser, Apache Server Software, MySQL database, and php are just a few examples of Open Source applications.