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Small businesses should think of good supply chain management relationship with suppliers

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According to a revealing research released by Envirowise, the UK’s small and medium-sized businesses are not successful in developing effective and workable supply chain relationships, most especially in the retail sector. It was discovered that 91% of retailers and their suppliers are in contact on a weekly basis, while 94% realise and see the value of effective supply chain management. But only a few of them are actually focused on actually trying to develop a collaborative relationship and programmes that can strengthen their stability and competitiveness especially during times when the economy is not doing good.

This was reinforced by the retailers themselves who have admitted to taking a “cost-cutting” response to economic pressures that can damage relationships with suppliers and threaten the long-term survival of small firms in the supply chain. It was also shown that: 56% look for cheaper suppliers during times of hardship; 53% ask suppliers to cut their prices, and; 36% looks into the possibility of cutting down the number of suppliers they use.

Envirowise experts have observed that even though retailers are constantly incontact with their suppliers they are not really collaborating with them. The group described it as “left brain” supply chain management, which focuses solely on logistics and process issues.

As a contrasting view, a number of forward-thinking businesses are looking at how to develop collaborative supply chain relationships that could deliver real “bottomline” benefits and smoother running supply chain while also assuring suppliers with a secure future with them.

Company formation and business solutions experts agree that retailers should develop a good relationship with suppliers on the outset and build a good supply chain management relationship with them as a way of future-proofing business growth.

SMEs should have a business continuity plan

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According to research recently done by Cable & Wireless, a majority of small and medium-sized businesses (SMEs) do not have a contingency plan in place for staff who might not be able to reach company offices in the event of an emergency.

According to the research, over 65% of SMEs have revealed that their businesses will be significantly affected if their staff were unable to go to the office for at least a day. However, a third of SMEs outside London and about two-thirds of business in London do not have a business continuity plan in place for such emergencies.

The same survey also said that of the 100 businesses interviewed less than a third have actually updated their business continuity plans after the July 7 London bombings.

Company formation and business solutions experts warn that not having a workable business continuity plan can have a detrimental effect on their business in case another emergency happens.

This sentiment was also echoed by Institute of Directors Senior Policy Advisor Jim Norton. He said that business leaders have a responsibility to take care of their businesses and think up of a continuity plan as a contingency measure.

The survey also revealed that although a third of the respondents realise the need to back up sensitive office data, there are no available back-ups outside of their headquarters – a potential problem if ever a situation arises wherein their offices become accessible.

Norton has said that small and medium-sized businesses should seriously pursue business continuity planning and this means backing up data to an offsite location, prepare for alternative facilities and provide employees with the necessary technology that will enable them to work from home if the need arises.

UK needs business “risk takers”

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Adaptability and innovation.

These are qualities that small businesses must possess in order to succeed in an environment where there is a rapid pace in technological advancement.

This was revealed by Trade and Industry Secretary Alan Johnson in an article he wrote for The Times.

Johnson said Britain must be able to make “entrepreneurial risk takers” who have developed the ability to identify opportunities and transform ideas into products and businesses. This is needed, he said, in order to compete and survive the threat posed by global players.

The Secretary said it is a business race to the top and that competitors like China and India will want to engage the British market and not other players at the bottom of the ladder.

He said the government realizes this need and are creating measures to develop an environment where running a business can be made available to anyone regardless of their background and to remove the misconception people have that enterprise is a valid career choice.

Although the UK has contributed to the global science, more must be done to increase productivity and competitiveness, Johnson stressed.

The Secretary also reiterated the importance for aspiring entrepreneurs to learn to use new ideas to their advantage because innovation alone will not be enough to close the so-called productivity gap without the proper motivation.

Business solutions experts agree with Sec. Johnson’s assessment saying that by heeding the advice of the Secretary is an important step towards revitalizing the outlook on how small businesses should be formed and how it must be operated.

Gov’t urges businesses to learn more about VAT options

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The British Chambers of Commerce
(BCC) and HM Revenue and Customs have joined forces and embarked on a six-month-long campaign that aims to raise awareness regarding VAT simplification schemes. This as new research has revealed that a majority of companies are not aware of the various ways to make VAT payments easier.

This new project has been launched in the midst of a study made by the BCC that showed that over a third of small companies do not know about the Revenue & Customs-approved VAT Schemes that directly apply to their establishments.

According to David Frost, director-general of the BCC, “Small firms in particular can find it difficult to calculate what taxes are due and when they must be paid. The various VAT simplification schemes on offer could help to make life a little easier for smaller firms. This campaign aims to raise awareness so that employers can decide whether there is a scheme out there that would benefit their business.”

Business solutions and Company formation experts have reminded firms that they should be aware of the various VAT options that are available to their businesses. This will give their companies the means to take advantage of certain flexibilities in the tax system that could be a means to further expand their businesses.
According to the BCC study, eight out of ten small businesses have admitted that they did not know that they had the ability to use a combination of VAT schemes to deliver the most appropriate options to their businesses.

Tips to ease the tax responsibilities for business owners (Part 1)

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For a growing number of people, the chance to work from home, form their own company and/or work for themselves is a possibility that they would welcome. Based on a recent study done by the Manchester Metropolitan University, there are now two million full-time home-based workers in the UK. But working from home has its own attendant problems like the tedium of preparing VAT returns and tackling income tax which is based on a self-assessment system.

Here are some tips that will help ease the difficulties of handling a home-based business:

1. Don’t forget to register your business with the HM Revenue & Customs (HMRC). Only three months are allotted for new businesses to do this. Failure to register would mean an automatic 100 fine. File Form CWF1 with the tax office immediately because this will ensure that you start on the right foot in terms of your tax responsibilities as well as informing the tax office of the business.

2. Always remember that you are now a part of the self-assessment system. An individual who starts a business during the 1005/06 tax year and who does not receive a 2006 tax return will have up to 5 October 2006 to notify HMRC. Failure to do this could result in penalties up to the amount of the unpaid tax.

3. Keep some cash on hand for taxation purposes. The 2005/06 income tax is payable on 31 January 2007 – which may look like it’s still too far into the future. But, business solutions experts warn, payments on account of the 2006/07 liability is payable on the same day, which could mean that the total amount to be paid could be large. Therefore, there’s a need to prepare for the cash as early as possible especially in light of the fact that HMRC does not offer extended credit terms.