Index

The 3M Company, see Minnesota, Mining and Manufacturing Company

ACCA, see Association of Certified Accountants (ACCA)

Accountancy, 126–127, 169

Accountants, 169–171

expecting from, 171

finding, 169–171

Accounting convention, 263

Accounting standards, 263

Accounts, 115–173

accountants, 169–171

expecting from, 171

finding, 169–171

annual review meeting, 172–173

balance sheet, 130

bookkeeping and management, 119–121

fixed assets, 131

goodwill, 131–133

valuations, 132–133

inspection, 54–55

legal advisors, 172

expecting from, 172

knowledgeable, 172

level of profit, 128

need to prepare, 115–116

profit and loss, 121–128

expenses, 123–128

income, 121

property, 133–169

annual percentage rate, 159–164

basis of valuation, 144

critical illness and health insurance, 145–147

current assets, 149–153

current liabilities, 154–155

finance/refinance, 141–143

fixtures and equipment, 147–148

freehold vs. leasehold, 135–138

funding of business accounts, 164–169

life insurance and endowments, 144–145

long-term liabilities, 155–156

motor vehicles, 148–149

negative equity and valuations, 143

net assets, 164

ownership agreement, 140–141

owning, 140

purchase of assets and equipment, 156–158

sale and leaseback, 138–140

type, 134–135

protecting income, 128–129

records, 116–119

tax enquiries, 129–130

Accruals, 154

Adidas, 21

Administrative expenses, 270

Advertising, 126, 180–181

Agricultural relief, 113

American Association for Critical Illness Insurance, 146

Amron, Alan, 15

Angel investor, 243

Annual Exempt Amount, 105

Annual percentage rate (APR), 159–164

on payday loans, 162–164

working out leasing deal, 160–162

Annual review meeting, 172–173

Annual tax on enveloped dwellings (ATED), 106–107

Annuities, 236, 237–238

Apple, 9–10

APR, see Annual percentage rate (APR)

Assets

and equipment purchase, 156–158

hire purchase agreement, 157

lease payments, 157–158

own cash, 156

unsecured loan, 156–157

realization of, 215–216

Associated creditors, 211–215

Association of Certified Accountants (ACCA), 170

Atari, 9

ATED, see Annual tax on enveloped dwellings (ATED)

AuctionWeb, 6

Bad credit control, 199

Bad debts, 151

Balance sheet, 130, 261

Bank account balance, 153

Bank borrowing, 49

Bank charges, 127

Bankers, greedy, 201

Bank loan interest, 128

Bank overdraft, 154

Bankruptcies, 199, 245

Bank statements, 117

Barings Bank, 201

Basic partnership, 31–32

Benchmarking, 170

Blogging, 180

BOGOF, see Buy one get one free (BOGOF)

Bookkeeping and management, 119–121

Brand and logo, 26–27

Branson, Richard, 224

Bridgewater Associates, 71

Budgeting and cash flow, 33–39

Business, 11–24, 11–24

accounts funding, 164–169

capital, 166–167

current, 167–168

drawings and payment of tax, 168–169

brand and logo, 26–27

buying and selling, 43–64

accounts inspection, 54–55

crowdfunding, 52–53

Enterprise Investment Scheme (EIS), 60–62

finance, 49–52

franchise business, 55–56

incorporated business, 59–60

limited company, 58–59

outlook, 57–58

purchase price, 45–47, 57

sales price, 59

sales split, 58

tax issues, 54

transfer, 47–48

value-added tax (VAT), 47–48

chasing sales, 227–228

company name, 23–24

design, 26–27

disastrous decisions, 224–225

essentials, 249–255

assuming things, 251

attention to detail, 251

customer, 249

get insured, 252

ignoring financials, 252

improvements, 250

incorporation, 250

making successful business, 253

partners and staff as team, 250

personal complaints line, 249

plan, 250, 253–255

react to change, 251

start pension early, 253

stress, 252

take advice, 252

think positively, 250–251

expenses, 118, 129

failures, 200–201

formats, 18–19

unique selling point (USP), 18–19

fraudulent trading, 226–227

growth opportunity, 245

limited company, 29–30

location, 19–20

model and budget, 78, 79, 200–201

partnerships, 21–23, 31–33

Dassler Brothers Sports Shoe Company, 21

working as team, 22–23

plan, 16, 25–26, 39, 200–201

poor performance, 225–226

pricing and costings, 39–41

promoting, 175–188

advertising, 180–181

blogging, 180

contests and free gifts, 182

discounts, 187

e-mail campaigns, 179

geo-marketing, 184–185

impulse buying, 185–186

joint marketing, 182–183

mailings, 178

marketing methods, 183–184

networking, 187–188

press releases, 180

push and pull marketing, 186–187

return on investment, 177–178

social media, 179

sponsorship and publicity stunts, 181–182

subcontract web content, 181

website, 175–177

purchase, 171

setting up, 11–18

budgeting and cash flow, 33–39

developing idea, 16–18

evolution, 12–13

opportunity, 13–14

plan, 25–26, 39

Post-it note, 14–15

technological developments, 15–16

unemployment//redundancy, 13

Velcro, 15

Viagra, 12

sole trader approach, 28–29

successful, 189–196

cost cutting, 192–193

extra outlets, 189–190

fine-tuning, 191

franchising, 190

sales promotions and marketing campaigns, 193–196

time to bring, 20

wrongful trading, 226–227

Business Relief, 112

Buying and selling, of business, 43–64

accounts inspection, 54–55

crowdfunding, 52–53

Enterprise Investment Scheme (EIS), 60–62

finance, 49–52

franchise business, 55–56

incorporated business, 59–60

limited company, 58–59

outlook, 57–58

purchase price, 45–47

sales price, 59

sales split, 58

tax issues, 54

transfer, 47–48

value-added tax (VAT), 47–48

Buy one get one free (BOGOF), 193

Campaign Monitor, 179

Capital accounts, 165, 166–167

Capital allowances, 110

Capital gains tax (CGT), 62, 103–106

for people non-domiciled in UK, 106

rates and bands, 105

rules, 104–105

Capital Gains Tax Deferral Relief, 62, 64

Cash ISA, 232

Certified Public Accountants Institute, 170

CGT, see Capital gains tax (CGT)

Chartered accountants report, 258–259

Chasing sales, 227–228

Checkbooks, 117

Churchill, Winston, 227

Coaching and mentoring, 66

Coca-Cola, 225

Companies House, 3, 6

Company voluntary arrangement (CVA), 203–222, 203–222

alterations to proposal, 215–216

index to appendices, 216

realization of assets, 215–216

proposals, 206–215

associated creditors, 211–215

deferred creditors, 210

preferential creditors, 209

secured creditors, 209

unsecured creditors, 210

Competitors and business, 201

Compound interest, 161

Computerized stock system, 150

Confinity, 7

Contests and free gifts, 182

Continuing professional development (CPD), 124

Contractual liabilities, 201

Cookies, 195

Cooking the Books Limited, 24

Corporation tax, 97–98

Cost cutting, 192–193

Cost savings review, 192

Courses and staff training, 124

Court of Appeal, 70

CPD, see Continuing professional development (CPD)

Credit card, 163

charges, 127

facilities, 152–153

payments, 151, 152–153

Critical illness and health insurance, 145–147

Critical illness policy, 129

Crowdfunding, 52–53, 242, 243

Current account, 166, 167–168

Current assets, 149–153

cash at bank and in hand, 153

credit card facilities, 152–153

debtors, 151

stock, 149–150

work in progress and prepayments, 153

Current liabilities, 154–155

Customer details, 194

CVA, see Company voluntary arrangement (CVA)

Dasani, 225

Dassler, Adolf, 21

Dassler, Rudolph, 21

Data capture system, 183

Debt crowdfunding, 53

Debtors, 151, 153, 266

Deferred creditors, 210

Deferred taxation, 264

Delayed property transaction, 51

Depreciation, 127–128, 263

Director’s loan account, 154–155

Directors responsibilities, 262

Discounts, 187

Dishonesty and business, 201

Dividend returns calculation, 219–221

Dividends, 30, 94, 96

Dominant customer, 197

Drawdown, see Income drawdown

eBay, 6–7

EEC, see European Economic Community (EEC)

EIS, see Enterprise Investment Scheme (EIS)

Electricity and oil costs, 124

Electronic wallet, 7

E-mail campaigns, 179

E-mail newsletters, 178

Employed individuals, 76

Employers’ liability, 70–71

Employment, 75

concept, 78

contract, 79–90

legislation, 70

Employment Appeals Tribunal, 70

Enterprise Investment Scheme (EIS), 60–62

Entrepreneurs, 3

Entrepreneurs Relief, 5, 108–109

Equipment leasing, 125

Equity crowdfunding, 53

Equity instrument, 264

European Court of Justice, 70, 79

European Economic Community (EEC), 102

Excel, 34

Expenses, 118, 123–128

Expense sharing partnership, 32

Extra outlets, 189–190

Farming businesses, 230

FDD, see Franchise Disclosure Document (FDD)

Finance, 49–52

Financial advisors, 240

Financial forecasts, 38

Financial instruments, 264

Financial Reporting Standard for Smaller Entities, 262, 263

Financial statements, 263–268

Fixed assets, 131

Fixed rate loan, 142

Fixtures and equipment, 45, 147–148, 266

Ford Motor Company, 9

Franchise business, 55–56, 190

Franchise Disclosure Document (FDD), 56

Freehold vs. leasehold property, 135–138

Free offer vouchers, 193–194

Fry, Arthur, 14

Gearing, 138–140

Geo-marketing, 184–185

Gig economy, 78–79

Global positioning system (GPS) tracking, 184

Goodwill, 45–46, 131–133, 171, 263, 265

annual percentage rate, 159–164

basis of valuation, 144

critical illness and health insurance, 145–147

current assets, 149–153

current liabilities, 154–155

finance/refinance, 141–143

fixtures and equipment, 147–148

freehold vs. leasehold, 135–138

funding of business accounts, 164–169

life insurance and endowments, 144–145

long-term liabilities, 155–156

motor vehicles, 148–149

negative equity and valuations, 143

net assets, 164

ownership agreement, 140–141

owning, 140

purchase of assets and equipment, 156–158

sale and leaseback, 138–140

type, 134–135

valuations, 132–133

GPS, see Global positioning system (GPS) tracking

Guinness, Arthur, 136

Health insurance, critical illness and, 145–147

Hire purchase agreement, 157

Hire purchase interest, 128

HM Customs & Excise, 199–200

ICAEW, see Institute of Chartered Accountants in England and Wales (ICAEW)

IHT, see Inheritance Tax (IHT)

Il Giornale, 7

Illness, 198–199

Impulse buying, 185–186, 194

Income, 121

and business, 118

and expenses, 117–118

protecting, 128–129

Income drawdown, 236–237, 238

Income tax, 92–97

dividends, 96

planning for directors, 96–97

Incorporated business, 29–30, 59–60

Incorporation process, 171

Individual savings accounts (ISAs), 232–233

Inheritance Tax (IHT), 63, 111–113

Innovative finance ISAs, 232

Insolvency

and liquidators, 201–202

process, 223

reasons for, 197–200

Insolvency Act 1986, 209

Institute of Chartered Accountants in England and Wales (ICAEW), 170

Insurance companies, 194

Insurance costs, 125–126

Intangible fixed assets, 131, 265

Internet, 186

Investment income, 265

Jobs, Steve, 9, 10

Joint marketing, 182–183

Joint tenants, 137

Konosuke Matsushita, 8

Landline costs, 125

Leasehold property, freehold vs., 135–138

Lease purchase arrangements, 218

Leeson, Nick, 201

Legal advisors, 172

expecting from, 172

knowledgeable, 172

Legal and professional fees, 127

Levchin, Max, 7

Liabilities, 267

Life cover, 129, 237

Life insurance and endowments, 144–145

Limited company, 29–30, 58–59

Limited liability partnership, 32–33

Liquid assets, 149

Liquidation, 223–224

Liquidators, insolvency and, 201–202

Loan repayments, 44, 49–50

Locum cover, 129

Long leasehold property, 135–136

Long-term liabilities, 155–156

Loyalty cards, 194

Mailings, 178

Market

experience in, 200

methods, 183–184, 200

Markkula, Mike, 9–10

Matsushita Electric, 8

Mestral, George de, 15

Minnesota, Mining and Manufacturing Company, 14

Mobile payments, 151, 152

The Money Laundry Limited, 24

Mortgages, 163

Motor expenses, 126

Motor vehicles, 148–149

Musk, Elon, 16

National Employment Savings Trust (NEST), 68, 241

National insurance, 101, 110–111

National Insurance Employment Allowance, 97

National Minimum Wage, 69–77

employers’ liability, 70–71

employment legislation, 70

redundancy pay, 74–77

staff management, 71

staff relationships, 71–72

Statutory Adoption Pay, 72–73

Statutory Maternity Pay, 72–73

Statutory Paternity Pay, 72–73

Statutory Shared Parental Pay, 72–73

Statutory Sick Pay, 73–74

Negative equity and valuations, 143

NEST, see National Employment Savings Trust (NEST)

Net assets, 164

Networking, 187–188

Nike, 21, 26

Non-building fixed assets, 165

Non-domiciled individuals, 106

Non-specialist accountants, 171

Non-specialist business valuer, 133

Official Records Office, 4

Old pensions, 241

Omidyar, Pierre, 6–7

Online advertising, 180–181

Online business, 20

Operating profit, 265

Ownership agreement, 140–141

Panasonic, 8

Payday loans, 162–164

PAYE system, 66, 72, 75, 77, 78, 111, 117, 121

Paying-in books, 117

PayPal, 6–7

Peer-to-peer (p2p) lending, see Debt crowdfunding

Pen Island, 23

Penisland.net, 23

Pensions, 231–239

annuities, 236, 237–238

income drawdown, 236–237, 238

individual savings accounts (ISAs), 232–233

state pension age, 233–236

tax relief, 238–239

types, 239–240

Pensions, staff, 67–68

Petty cash, 153

Pfizer, 12

Postage and stationery costs, 125

Post-it note, 14–15

Powergenitalia.com, 23

Preferential creditors, 209, 219–221

Prepayments, 153

Press releases, 180

Pricing and costings, 39–41

Principal’s withdrawals, 168–169

Printer toners cost, 125

Privately owned businesses, 245–247

Private medical insurance, 146

Private Residence Relief, 105

Profit, 128

and loss account, 121–128, 260, 267, 269

expenses, 123–128

income, 121

share arrangement, 66

Pro forma employment contract, 81–85

Pro forma freelance agreement, 86–90

Property, 45, 133–169

annual percentage rate, 159–164

basis of valuation, 144

critical illness and health insurance, 145–147

current assets, 149–153

current liabilities, 154–155

finance/refinance, 141–143

fixtures and equipment, 147–148

freehold vs. leasehold, 135–138

funding of business accounts, 164–169

life insurance and endowments, 144–145

long-term liabilities, 155–156

motor vehicles, 148–149

negative equity and valuations, 143

net assets, 164

ownership agreement, 140–141

owning, 140

purchase of assets and equipment, 156–158

sale and leaseback, 138–140

type, 134–135, 134–135

Property capital, 165

Pull marketing, 186–187

Puma, 21

Purchase and expense invoices, 117

Purchase price, 45–47

Push marketing, 186–187, see Direct response marketing

Qualifying days (QDs), 73

Receivership, 223

Recruitment costs, 123–124

Redundancy pay, 74–77

Repairs and maintenance, 124–125

Representative APR, 163

Resources, lack of, 200

Retirement and succession, 229–247

challenge and role in business, 243–244

financial advisors, 240

investing in privately owned businesses, 245–247

investing in someone else’s business, 242–243

investment, 244–245

NEST, 241

old pensions, 241

passing business to family, 229–231

pensions, 231–239

annuities, 236, 237–238

income drawdown, 236–237, 238

individual savings accounts (ISAs), 232–233

state pension age, 233–236

tax relief, 238–239

types, 239–240

retirement date, 241–242

Return on investment, 177–178

Revenue Authorities, 72

Rewards and customers, 194

Sale and leaseback arrangement, 138–140

Sales cost, 59, 123

Sales promotions and marketing campaigns, 193–196

Sales split, 58

SAP, see Statutory Adoption Pay (SAP)

Schultz, Howard, 7

Search engines, 23

Second-level capital acquisitions, 244

Secured creditors, 209

Secured loan, 156

Seed Enterprise Scheme (SEIS), 60, 63–64

SEIS Reinvestment relief, 64

Self-employed individuals, 76, 77, 231, 233

Self-employed subcontractors, 68–69

Self-employment, 75

Self-invested personal pensions (SIPPs), 240

Share capital, 267

Share ownership, 30

Short leasehold property, 135–136

ShPP, see Statutory Shared Parental Pay (ShPP)

Silver, Spencer, 14, 15

SIPPs, see Self-invested personal pensions (SIPPs)

Small Business Administration, 2, 5

SMP, see Statutory Maternity Pay (SMP)

Social media, 12, 179

Sole trader approach, 28–29

Solicitors, see Legal advisors

Specialist valuers, 133

Speed of Art, 23

Sponsorship and publicity stunts, 181–182

SPP, see Statutory Paternity Pay (SPP)

SSP, see Statutory Sick Pay (SSP)

Staff costs, 192

Staffing, 65–86

contract of employment, 79–86

pro forma, 81–90

National Minimum Wage, 69–77

employers’ liability, 70–71

employment legislation, 70

redundancy pay, 74–77

staff management, 71

staff relationships, 71–72

Statutory Adoption Pay, 72–73

Statutory Maternity Pay, 72–73

Statutory Paternity Pay, 72–73

Statutory Shared Parental Pay, 72–73

Statutory Sick Pay, 73–74

pensions, 67–68

self-employed subcontractors, 68–69

setting wage levels, 66–67

Stakeholder pensions, 239

Stamp Duty Land Tax, 107–108

Starbucks, 7–8

Startup business, 2–4, 244

government assistance for, 4–6

Statement of affairs, 217–218

State pension age, 233–236

Statutory Adoption Pay (SAP), 72–73

Statutory information, 221–223

Statutory Maternity Pay (SMP), 72–73

Statutory Paternity Pay (SPP), 72–73

Statutory Shared Parental Pay (ShPP), 72–73

Statutory Sick Pay (SSP), 73–74

Stock, 149–150, 263

and consumables, 47

records, 118

Stocks and shares ISAs, 232

Subcontract web content, 181

Subscription costs, 125

Sundry expenses, 125

Supermarkets, 41, 185, 198

Supervisor fees and remuneration, 212–213

Tangible fixed assets, 131, 263, 266

Tax allowances, 148

Taxation, 29, 52, 265

Tax Authorities, 28, 64, 75–77, 91, 98, 107, 108, 115, 119, 129–130, 133, 150, 242

Taxes, 91–113

agricultural relief, 113

Annual Tax on Enveloped Dwellings (ATED), 106–107

capital allowances, 110

capital gains, 103–106

for people non-domiciled in UK, 106

rates and bands, 105

rules, 104–105

corporation, 97–98

enquiries, 129–130

Entrepreneurs’ Relief, 108–109

income, 92–97

dividends, 96

planning for directors, 96–97

Inheritance Tax, 111–113

issues, 54

legislation, 44–45

national insurance, 110–111

payment, 168–169

planning exercise, 98–99

relief, 57, 60, 142, 157, 238–239

saving, 271

scheme, 30

Stamp Duty Land Tax, 107–108

value-added, 102–103

rates, 103

year one, 99–100

year three, 100–102

year two, 100

Tax man and source of capital, 199–200

Tesla, 16

Training, 56, 66

Transactions, 43, 152, 154, 268

Turnaround companies, 244–245

Turnover, 263

Uber, 79

UK Supreme Court, 70, 79

Unaudited statutory financial statements, 258–259

Unemployment/redundancy, 13

Unique selling point (USP), 18–19

Unsecured creditors, 210, 219–221

Unsecured loan, 156

USP, see Unique selling point (USP)

Valuation, 132–133, 143–144

Value-added tax (VAT), 47–48, 102–103

Velcro, 15

Viagra, 12

Virgin, 224

Virgin Cola, 224

Voluntary arrangement, 202, 223–224

Wages

records, 117

and salaries, 123

Water rates, 124

Web-hosting services, 180

Website, 175–177

Work from home, 124

Working capital, 155, 165–166

Work in progress provision, 153

Wozniak, Steve, 9

YouTube, 20

Zero-hours contracts, 28, 77