The Business Clinic – September 2015

Expert advice on the business of running a garment decoration company

THIS MONTH’S TOP BUSINESS STORIES

• According to research published in August by invoice financing company Tungsten Corporation, nearly a quarter of all UK SMEs have been at risk of closure thanks to late payment of invoices. The survey of 1,000 companies revealed that the average SME has £20,937 in overdue invoices.
• The latest government borrowing figures showed a surplus of £1.3 billion in July, according to the Office for National Statistics. Michael Martins, economic analyst at the Institute of Directors, comments: “The fact that the Government ran a surplus, for the first time since 2012, highlights the strength of the UK’s economic recovery.”

Using Social media for business: navigating the challenge

Lots of smaller businesses recognise the potential of social media to unlock new markets and start conversations with new customers. But most are unsure of how to go about it. With Facebook, Twitter, LinkedIn, Google+, Instagram, Snapchat and many (many) more social touchpoints available, how can you find the right place online to engage with your customers? More importantly, how can you make sure that your efforts are ultimately profitable?

Naturally, different businesses have different needs. LinkedIn’s Premium (paid-for) service is ideal if you want to find and network with specific firms. But it takes commitment – anything more than around four hours a week should be a worthwhile investment. Facebook and Twitter are ideal media for your business if you want to engage in immediate, one-to-one conversations with customers, champions and complainants. Instagram is fast becoming a great place to visually communicate what your product or service is all about on a day-to-day basis.

Ultimately though, the key to success with social media is good planning and measurement. Good planning ensures that you can be available when users want to engage. Good measurement ensures you can see the value this activity is creating for your business.

To plan your strategy, aim to develop a three-month burst of posts and conversations. Time your activity around industry events or sales peaks. Have an idea of what you want to achieve (whether its ‘likes’, new contacts or views) – all the social media platforms will allow you to track reach and give you access to metrics. Consider using a tool such as HootSuite to help you plan a social media campaign or period of activity.

Most importantly, commit the time to do it consistently over your three-month period. Social media is here to stay. People who post in a flurry one week and are gone the next tend to be ignored by the real users – your customers.

Q&A

”I’m the owner and managing director of my business: without wishing to sound morbid, what practical steps can I take to make sure that my family and my employees will be looked after if I die unexpectedly?”

Your absolute priority is to make a will. This is the only way to protect your family and employees. You may also want to consider life insurance, both personal and for your business.

Through your will you can appoint family executors to deal with your personal matters, and professionals to manage your business.

By making a will, you will ensure that your family receives what you intend to give them, in the most tax efficient manner possible. Without a will, your family may end up paying significantly more inheritance tax than is necessary. If you have children you can arrange for trusted individuals to manage their inheritance until they’re old enough to do so themselves.

Your personal accounts are going to be frozen as soon as the banks know you have died. It is helpful to have a joint account with enough money in to provide immediate funds for your family. Life assurance is another way of providing money quickly, as it is paid on proof of death, not probate.

As part of your business expenses, you should consider life insurance to provide enough money to employ a manager short term if required to continue the business. It would also be very helpful to have a continuity plan in place, so that the business can stay open, and make sure you have another signatory on your accounts so that staff can be paid.

Your executors are going to have to value your business, so the better your paperwork, the easier it will be for them to agree the figures with HM Revenue and Customs. You should discuss this possibility with your accountant and your lawyer so that they are ready, should the worst happen.

If you have a business question for any of our experts, email it to: editorial@images-magazine.com