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Introduction
As before, I thank Roderick Millar for his work on previous editions of the book. For those with young businesses that have survived the first two or three years relatively unscathed, pay particular attention to the case study in Chapter 18, which is a follow-up to one of the two case studies in Chapter 1.
Part One
Planning Your Business
Defining and Analysing Your
If your start-up needs a bank loan or overdraft and you haven't made any arrangements with your bank yet, make sure money is available. If the market you're entering is already depressed or likely to be hit by the economic slowdown soon, you might be wise to delay your startup for a year or more.
BUSINESS START-UP EXPERIENCE IN THE UK
For those starting out in business even before the current downturn, the harsh reality is that 30 percent of businesses fail within three years. T Construction continued to generate a high level of starts with a 14 percent increase in that quarter compared to the third quarter of 2006.
PROFILING BUSINESS START-UP ENTREPRENEURS
The age factor
The same Abbey National research also discovered that 65 per cent of Britain's small business owners would rather employ older staff because they work harder and are more reliable. However, 87 percent of the adult population now think that people who start businesses and fail deserve a second chance (except in cases of fraud or malpractice).
Women in business
While the proportion of adults who admire people starting their own business rose from 86 percent in 2001 to 93 percent in 2003, only 64 percent, compared to 76 percent in 2001, would encourage a friend or relative to start a business . The top 10 activities where women start their own business include: hairdressing and beauty salons, retail clothing, other specialist non-food retail, health and physical well-being, takeaway food shops and stalls, licensed and unlicensed restaurants and bars, building cleaning services and management - and business consulting, including public relations and event management.
USING BUSINESS SUPPORT ORGANIZATIONS
T www.businesslink.gov.uk/regulationupdates provides an overview of new regulations, offering guidance in plain English. T www.businesslink.gov.uk/bdotg/action/sectorsSIMLanding Page?R amp;r.s=m identifies important rules and licenses that apply to specific business categories.
DEFINING YOUR BUSINESS
The market for your product or service
Some banks offer a range of concise publications that can help you start and maintain your market research. Just offering good service and after-sales care can be enough to give you a Unique Selling Proposition (USP).
What price should you charge?
You can gather facts and figures about your target market from websites, by contacting trade associations and from their publications, or from your local library. From this research you should be able to develop a clearer picture of the competition you face and confirm whether you are offering something special.
What sort of business structure do you want?
If you plan to work for yourself in the near future, doing business as a sole proprietor will avoid all the regulations that apply to limited liability companies; you only need to inform the income tax authority and the social security authority that you are self-employed. If you intend to run your business as a private limited company, you will need the help of an accountant or lawyer to go through all the formalities of setting up a business before you start trading.
ANALYSING YOUR BUSINESS NEEDS
Before doing so, make sure you understand the full implications - each partner is personally liable for any debt incurred by the business, even if it is managed by another partner - and agree among yourselves how the business should be run, how profits should be shared and what will happen if you have to wind it up. Given the complexity of employment law and the implied risks of litigation, the limited company is probably more appropriate if you expect to employ more than one or two non-family members.
Start-up funds
All of these matters should be covered in a legally binding partnership agreement that is prepared prior to commencing business. There may be grants available for your start-up business and information will be available from local agencies through business connections and chambers of commerce or check the business grant search service at www.anbusiness.com.
Employing staff
According to a Key Note Ltd 2002 report 'Small businesses and banks', the use of the different types of external funding by source across the EU and likely changes up to 2006 were as shown in Table 1.2. The whole area of employment regulations and good practice in human relations is a complex minefield to which Chapter 11 is devoted.
The location for your business
HOW OTHERS STARTED
CASE STUDY: LEGEND PRESS
Capital and cashflow
This year, he aims to raise additional funding to finally properly capitalize the companies for long-term growth; however, with low funds, this activity is balanced with day-to-day operations, which can be adversely affected by the time-consuming nature of fundraising.
The books
Infrastructure
Margins and returns
Legend Press has attempted to negate this or minimize its impact, first by seeking to increase margins through direct sales, pushing for ever-low printing costs, changing distributors and renegotiating terms with retailers through the economies of scale Legend Press generates. and now adding another publication list in Paperbooks. While publishing services can be time-consuming and take time away from core business growth until companies reach critical mass, they provide an important source of margin for sales and cash flow.
Being known and building reputation
Growth
Growth through increased title acquisition - currently looking for both presses to publish 25 titles per year before re-evaluation;.
The future
CASE STUDY: CRAVE MATERNITY
From small beginnings
Gathering the spare time involvement of her husband, Kevin Wildman, and the creative input of an old school friend and shoe designer, Sarah Crumbie, Helen started Business Bump on a small scale, primarily as a mail order business.
Serious stuff – raising finance for development
Fulfilling its promise – January to September 2005
Another eventful year – September 2005 to June 2006
The Crave Maternity website has also attracted new distribution channels both within the UK and internationally. To date, Business Bump has supplied over 20 major independent boutiques out of 181 specialist maternity outlets in the UK and Northern Ireland.
CASE STUDY: DELIBERATE PR
Benjamin realized that his news-centric approach to PR and media relations could not only deliver faster campaign results and return on investment for the client, but also fit perfectly with clients looking to benefit from the growing importance of online news sources and the emerging blog . community. His belief in this alternative, news-focused approach was such that in January 2007 he decided to leave the agency he helped build, give up all his rights to stock and equity, and start over.
Serious stuff – setting up
By the time the book was published, Purposeful PR had made international headlines for Dancing With The Bear through inventive angles. Work on Dancing With The Bear, in turn, attracted interest from the media industry as a whole.
YOUR FIRST SWOT ANALYSIS
Business Bump also needed seed funding after its initial self-funding phase and a relatively high degree of risk. This can be the first moment of truth when you decide to abandon the original business idea or significantly modify it.
INHERENT WEAKNESSES AND THREATS
The same SWOT analysis can be applied at any stage of your company's development to monitor progress and identify any constraints to future growth. If you are unsure of your personal strengths and weaknesses, try performing a mini-SWOT on yourself in the form of a balance sheet, being as objective as possible.
FACING UP TO ENTREPRENEURSHIP
At the heart of your decision-making is your own resourcefulness, initiative, imagination, determination and resilience – the personal qualities that are fundamental to success and without which any limitations to the growth of your business would likely be insurmountable. Limitations in personal qualities can sometimes be compensated for by association or partnership with others who are strong in the qualities you lack and, perhaps, weaker in those qualities where you are strong.
Checklist
If you don't know how to overcome weaknesses or deal with threats, change your basic business idea or abandon it. T If you are unsure whether you will have sufficient funding for the first two years, or if you feel that the market you want to enter will suffer a recession in the near term, delay your start.
Researching Your Market
Environment
DIFFERENT TYPES OF RESEARCH
RESEARCH OBJECTIVES
What is the profile of your average target group and what market share can you capture? Depending on the nature of the business and its scope, there will be more or less information you can gather through desk research before thinking about how to research the target market yourself through field research.
CARRYING OUT DESK RESEARCH
For Business B, your previous work experience will help you carry out desk research and answer more of the 10 key questions. You should not rely solely on your experience to answer Question 6 (What are consumers/customers looking for?) or Question 7 (Where in the market should you position your product/service?), although it can provide strong pointers about the range of services what you have to offer and the market sector you have to target, which can be tested in the next stage.
ENGAGING IN FIELD RESEARCH
However, in the context of local business planning, office research alone will not provide answers to the last seven questions. Within the latter market, there are likely to be many niches depending on the size of the company and the nature of its products or services.
Sampling
Questionnaire design
Other field research
USING YOUR MARKET RESEARCH FINDINGS
First, define your research objectives in terms of the key questions you need to answer. Discipline yourself to build a representative sample of the market and prepare formal questionnaires.
Developing Your Formal
WRITING THE BUSINESS PLAN
Of the formal financial planning documents, cash flow projections are the most important. After formulating the assumptions on which the plan is based, it makes sense to first write a cash flow projection from which profit and loss estimates can be easily expanded.
Refined SWOT analysis
Note: Sales are scheduled according to the actual month in which the customer's payment is to be received. Expenses, including prepayments, are planned for the month in which they are expected to be incurred.
Executive summary
EXTERNAL WEAKNESSES AND THREATS
Market size and rate of growth
Environmental change
Registration and/or qualification barriers
There are other professions that are less demanding in terms of qualification, but in practice you may find it very difficult to start your own business without taking out membership of an accepted professional association in that field. Membership in a trade association is what elevates a construction worker or amateur carpenter to a skilled building practitioner.
Pending legislation or regulation
On the other hand, some established brokers and advisers in the field have been discredited as victims of unfunded pension schemes and fund policies multiply, and there may be opportunities for new firms to enter the market, offering a new generation of user friendly. products. The most common examples of changes to regulations are local planning consents which place (or remove) restrictions on the location of particular types of business.
Technology developments
Therefore, pending legislation can be a deterrent to starting a business before the legislative playing field has been redefined. An example of this is the field of life insurance and pensions, where in recent years much stricter regulation has been introduced regarding both the content of pension schemes and life insurance policies, as well as marketing and sales.
Intellectual property
You must also be careful not to infringe the intellectual property rights of other companies, particularly a former employer, in respect of know-how or 'knowledge assets' which they have articulated and packaged into hard copy, disc, CD-ROM or electronic format for delivery as internal training or to customers, suppliers or other third parties, perhaps under license. Knowledge assets can also take the form of management systems, training programs, marketing and customer relationship techniques.
Major accident and occupational health and safety risks
There is no copyright in intellectual concepts, only in the form in which they are expressed and published. Conversely, you should pay attention to protecting your IPR by making your product or service offering as distinctive and unique in its presentation as possible.
TAKING ADVICE
T Potential financiers will also be looking for a comprehensive plan that demonstrates that you have thoroughly thought through your business idea. T Get professional advice on writing a business plan if you've never written one yourself.
Part Two
Funding the Start-up and
Finance
Some things will be accurate, like rent or wages, while others will require you to make an educated guess. By doing this, you will be able to identify where any difficulties are likely to arise and this means you can prepare and act early to avoid a crisis.
Funding Alternatives
PROPRIETORS’ OR FOUNDER SHAREHOLDERS’ CAPITAL
TERM LOANS AND OVERDRAFTS
This senior debt is usually secured by way of a term loan and/or a working capital or overdraft facility, depending on the needs of the company. The bank will constantly monitor the level of an overdraft and expect it to fluctuate, including periodically transitioning the account to credit.
ASSET-BASED FINANCE
GOVERNMENT SCHEMES AND GRANTS
Perhaps the most well-known source of equity capital is investment funds and venture capital funds run by municipal institutions. It should be emphasized that very few venture capital funds are really interested in investing in start-ups, regardless of what their marketing materials claim.
ALTERNATIVE CAPITAL STRUCTURES
Raising Capital
TAKING PROFESSIONAL ADVICE
In addition to the general areas of professional advice, there are a number of specific areas on which financiers will ultimately require professional advice. Independent professional advice or corroboration of parts of the business plan will greatly increase its impact and prove that a thorough approach was taken in its preparation.
WHAT THE BANKS OFFER
Missing costs or timing cash flows completely can undermine the economic viability of a business case, and at the very least, does not inspire confidence in the company or management as a whole. This includes matters such as intellectual property rights, copyright, certain employment and tax-related issues, the value of assets and property, environmental impact and other areas requiring specialist knowledge.
Current account
Business loans
IDENTIFYING EXTERNAL EQUITY SOURCES
Once potential sources are identified, the next steps are drawn out, and the whole process can take months, so it's best to accept and allow for this early on, rather than hoping that things will progress very quickly. As with any other "quote", it's best to get more than one initial quote to ensure you get the best deal possible.
FIRST-ROUND FINANCE
A decision will need to be made as to which offer seems most suitable, before spending any time or incurring any costs. many of the equity funds and venture capital providers consider that the level of work involved is similar regardless of the amount actually invested, and as such it is not economic for them to invest less than £1 million. Perhaps the best-known sources of equity, however, are the investment funds and venture capital funds managed by city institutions (see page 70).
PREPARING FOR DUE DILIGENCE
The most common source of funding for start-ups and lower levels of funding is "business angels". However, for the UK VC's 298 member firms, more than 50 per cent of investment is in expansion of existing businesses (i.e. second and third round funding), with the next largest type of investment being acquisitions, management buyouts and the like, leaving only a very small amount for funding in the first round.
NEGOTIATION AND CLOSING
Part Three
Management Functions
Marketing
This chapter will attempt to indicate some of the options available to those on a small business budget.
MARKET RESEARCH
Most of these information sources will be either free or inexpensive to access. The British Market Research Association will be able to provide a list: visit www.bmra.org.uk.
SEGMENTATION AND STRATEGY
It's very easy not to ask customers inquiring about your product where they heard about you, but it's also very foolish. It is therefore important to consider the impact that each marketing event you undertake will have on your entire range of goods, not just the single item you are promoting.
DIRECT MARKETING
It is worth investigating the use of direct marketing carefully if you intend to spend a significant percentage of your marketing budget on it. If your business is well established, you are likely to have built up a database of previous customers' details.
ADVERTISING AND PR
T Never bend the truth (this also applies to statements such as "a chance you only have once in a lifetime" if you don't): it cheapens the message and damages your reputation. If this route isn't available and you don't find your attempts with just a book to help you uninspiring, then it might be time to get some professional help - the PR agent.
Advertising agencies
If you have time to learn about it, then it will be time well spent; if not, it may pay to find an expert to help you. If you have any media contacts, they may be able to help craft the copy for you and show you what makes the difference.
PR agencies
How are their media contacts, especially in the area of media you are interested in. Towards the end of the fixed-term contract (you may need six months before any real progress can be judged), assess the difference in your profit margins the PR agency has made.
DAMAGE LIMITATION
T Beyond your relationship with the agency staff, you need to know how effective they are. If you feel that it is negligible, then discuss it with the agency and, if necessary, be prepared to leave it.
THE INTERNET
The silver lining for crises is that the media attention can be turned to the business's advantage if handled correctly. Where possible, buy standard internet packages that can be easily adapted to your business with your own 'home page'.
TRADE SHOWS AND EXHIBITIONS
Are you making "what you can sell" or are you trying to "sell what you can make". Are you confident that your marketing costs for any event are below the minimum probable return?
Sales and Customer Relations
REJECTION, PERSISTENCE AND THE SMALL BUSINESS FACTOR
The well-worn Pareto rule or 80:20 ratio works well here: 80 percent of your sales will come from 20 percent of your customers. You can afford a mass of below average customers if you have a hard core of excellent customers.
BUILDING A STRATEGY AND THE SALES PROCESS
If the salesperson cannot view the possibility of rejection positively, it will be very difficult for him or her to make another sales attempt, and the fear of further rejection will make the person uncomfortable and reticent - the very factors that attract rejection . . Since you've focused your marketing in this direction, you should have already 'softened' the reception you can hope to get when the sales force starts.
MOTIVATING AND REWARDING THE SALES TEAM
From this you will be able to determine if there is a pattern in the sales approach. Whether the time of the call, the type of customer or some other factor affects the sales result.
CUSTOMER SERVICE
If such an after-sales need does not exist, it is very easy to make your customers disappear forever. In summary, it is always advisable to keep the customer informed as much as possible and to act fairly.
TELESALES AND CALL CENTRES
When making phone calls with customers, it is important to create a positive image of yourself with them. Make sure you sound animated about your topic, even if it's to set up a meeting; so ditch the monotone and try to sound as natural and relaxed as possible.
Financial Controls and Management
CASH MANAGEMENT
Once you have determined what level of risk is acceptable to you and your supporters (unfortunately this can only be a general awareness of risk and not an absolute number), you can now look at how to achieve an exposure level that suits him. There are three main elements to managing your money: credit control – overseeing the flow of money to and from the business; stock control – how much money you have tied up in the warehouse at any time; and cash management – what you do with any spare cash or debt you have.
Credit control
The most frequent situation is where you have a mix of trade customers and suppliers on account. Do you have any persistent late payers (late payers are more likely to be a problem than bad debtors).
Stock control
Pure cash management
COST ANALYSIS
Read the trade press, search the internet, talk to everyone you might be dealing with in the same industry, from suppliers to competitors and delivery people. They will be facing the same problems as you and will be as eager to know your thoughts as you will be to know theirs.
PRICING AND ESTIMATING
Where you are a retailer with many items for sale and the need to attract a significant number of customers, the implications of your estimates become increasingly important. T If you believe your goods or services are of high quality, don't be afraid to price them accordingly.
BUDGETING AND CASH FLOW FORECASTS
In Table 8.5, the projected increases in sales figures are based on current experience and then reduced based on caution - this is wise. It may be fairly accurate (or not) for your first week or month of projections, but a small error can compound into a significant one by the twelfth month.
VARIANCE ANALYSIS AND MONTHLY ACCOUNTS
So it's always best to be careful with your assumptions - at this stage, the entrepreneur's natural optimism needs to be carefully controlled. The most likely reason, however, is that your assumptions were incorrect somewhere, and it's essential that you discover where so that you don't make the same mistake on the next set of budgets.
Total Variance
Do you know the ratios currently used in your type of business to measure and/or measure performance. You analyze where the anomalies come from and change future figures in light of these facts.
Bookkeeping and Administrative
THE BASICS
A manual system is still perfectly possible to keep up with this level of business, but one of the many computer-based systems may be more cost effective. While we've suggested that a commercial software system may be a more flexible and convenient option, it's still worth spending some time understanding how a manual system works.
SINGLE-ENTRY BOOKKEEPING
This will give you a feel for the numbers that each system produces, and therefore put you in a better position to understand the options that may be suggested to you. The rest of this chapter will show you how a manual system works, and also show where the computer-based system will differ.
Bank reconciliation
Once you start losing track of which payments and receipts have actually been cashed, you'll also lose track of your true cash balance.
DOUBLE-ENTRY BOOKKEEPING
From' is credit, so credit the cash account; 'to' is debit, so debit the phone account.
Day books or journals
Ledgers
Analyze each invoice according to the type of expenditure and remember when payment of the invoice is recorded in the cash book, the total amount must be entered in the 'creditors' column. The copying of the various entries from the journals to the ledgers is called 'posting'.
COMPUTERIZED ACCOUNTS
Thus, you can get an accurate picture of how much you spend in different areas of the business and how your sales of different products are performing.
OTHER ADMINISTRATIVE ISSUES
Invoicing and credit control
At the end of each month you will see which of your customers have not paid their invoices. That's why you're in business, and the customers should expect to pay for what they bought.
Employee-related administration
If you are concerned about any customers, you should also suspend their credit facilities, with a clear explanation of why you are doing so. Note that it is a legal requirement to keep all your books for six years, even if you have ceased trading, after which they can be destroyed.
Taxation
TAX PLANNING
However, recent changes in legislation have reversed some of the more positive measures introduced, notably the implementation in the 2006 budget of a minimum tax rate of 20 percent on all profits distributed. The new 22 per cent rate will then be higher than the rate when Gordon Brown became chancellor.
INCOME TAX
NATIONAL INSURANCE CONTRIBUTIONS
Employed earners group
Self-employed earners group
Self-employed and employed in the same year
CORPORATION TAX
CAPITAL GAINS TAX
Background
Following pressure from parties who had previously enjoyed an effective rate of tax of 10 per cent through business asset depletion relief, the chancellor introduced Entrepreneurs' Relief to give an effective rate of 10 per cent on the first £1m of gains from the qualifying disposal of the business in a taxpayer's lifetime.
Individuals’ liability to pay tax
Companies’ liability to pay tax
CAPITAL ALLOWANCES
Industrial and agricultural buildings
Plant and machinery
In the budget for April 2003, a new category of certain energy-efficient plants was introduced, including low-emission cars, for which 100 percent of the first year's capital grant is used. Capital allowances are an essential part of tax planning and are given regardless of how long the asset is owned in an accounting period.
RELIEF FOR TRADING LOSSES
Where a group exists, there will only be an balancing adjustment either when the business is discontinued or when the disposal proceeds in any year exceed the carrying amount of the group. Careful attention should be paid to the timing of major expenditures with the introduction of the annual investment allowance.
Reliefs available
Partnership losses
VALUE ADDED TAX (VAT)
Definitions
VAT compliance
If a business is registered or required to be registered, VAT must be charged and accounted for when there is a supply of standard or discounted supplies.. output' and the tax charged is called 'output VAT'. If only zero-rated goods are supplied (but exceed the registration threshold), a business must not register for VAT, but must inform HMRC of the obligation to register and apply to be 'exempt from registration'.
Cash accounting
If the customer is subject to VAT and the deliveries are for his company, this is referred to as 'inputs' by the customer. Registration must therefore take place if: a) at the end of a month the total of taxable supplies in the previous 12 months or less exceeds £67,000; or b) at any time the value of the taxable supplies alone is expected to exceed £67,000 within 30 days.
Bad debt relief
Annual accounting
Flat rate scheme
Tax planning for close company shareholders
Remuneration strategy
While dividends can be waived, if there is a dividend policy, all shareholders will receive the same amount per share. This can be a problem if there are passive shareholders or if there are large imbalances in share ownership.
Company planning: minimizing corporation tax
HMRC allows bonuses to be paid up to nine months after the end of the financial year, making it possible, certainly in the first year, to get tax relief effectively a year before normal pay. Some consideration must also be given to the likely profit in the next financial year.
Corporate structure
If profits are high, try to plan for other expenses so that, where possible, they are carried over to the appropriate financial year.
TAX RATES
From this date, tax is charged on the value of the contributions that exceed the annual allowance or, whichever is lower, the annual relevant earnings. Tax is also charged if the value of the pension fund exceeds the lifetime allowance.
Employment and Human Relations
EMPLOYMENT LAW
Given the scope and complexity of current UK employment law, this chapter can only provide a summary of the key issues and cannot replace proper legal advice. In this chapter we will use the word 'employee' to refer to any staff that you may employ to work for your company.
Employee rights from date of engagement
Comprehensive guidance is given in Barry Cushway's The Employer's Handbook (5th edn, 2007), Kogan Page, revised editions of which are published every year or so. T Application for salary arrears, holiday pay, termination etc. from the State Secretary in the event of the employer's insolvency.
Employee rights after one month’s employment
Employee rights after two months’
Employee rights after 26 weeks’
Employee rights after two years’
ADDITIONAL EMPLOYMENT
REGULATIONS THAT APPLY ACCORDING TO NUMBER OF EMPLOYEES
DISCRIMINATION LAW
Age Discrimination Act 2006 It is often not understood that the consequences of the various discrimination laws do not only apply to the employment of staff, but also in the recruitment process itself. You must take care to avoid indirect as well as direct discrimination, starting with the job profile you develop for recruitment purposes.
Sex discrimination GOQs
Avoid any question that could be interpreted as discriminatory on the grounds that it suggests that factors other than the ability to do the job may be taken into account, such as "Do you plan to have children in the near future?", "Would you like to take a long holiday in your country?” or “Will you have to take more time off for hospital visits?” The only exception to employment discrimination regulations is if there is a genuine occupational qualification (GOQ).
Transsexual discrimination GOQs
Unlike the previous two exceptions, this exception only applies where the employee intends or is in the process of undergoing gender reassignment, and does not apply once a transsexual has completed the gender reassignment. T Where the work provides personal welfare or other services to vulnerable individuals and in the reasonable opinion of the employer these cannot be provided by a worker undergoing gender reassignment.
Race discrimination GOQs
T Where the employer may have to carry out intimate physical searches in terms of statutory powers. T Where work is in a private home, as a result of social or physical contact with someone living in the home.
Religious or philosophical belief and sexual orientation GOQs
Contrary to the usual view, the GOQ defense is also available when an employer fires an employee. T When it is necessary to live in the work area and it is not reasonable to expect the employer to make alternative arrangements or equip the area to maintain decency or privacy.
Disability discrimination
As an employer, you must be sure that your company does not give disabled people worse treatment in the areas of recruitment, training and promotion or in the overall working environment. It is therefore important to seek specialist advice in connection with workers and job applicants with disabilities.
OTHER ISSUES INVOLVING EMPLOYMENT OR DISCRIMINATION LAW
T Employment of overseas nationals: all EU nationals have the right to work in the UK. T Manage absenteeism: establish a policy with clear written guidelines for reporting absences, notification in case of illness, frequent lateness, persistent unauthorized absence and payment during absence.
RECRUITING STAFF
T As an employer, you must be fully familiar with the employment implications of health and safety legislation and regulations. The Health and Safety Executive (HSE) published management standards in November 2004 which are a useful guide.
Deciding whether to recruit and defining the job
However, as your business takes off, you will likely need permanent staff to help you cope with the workload and to further develop the business. If you started your business to work from home, your family will certainly have formed a view of your strengths and weaknesses that they will be happy to express - although you may not be entirely comfortable with their assessment.
The recruitment process
Ensure that at least two references are obtained from parties who are not friends or family of the applicant. The job offer is part of the employment contract with an employee, so it is important to make sure that the terms of the offer are accepted.
CONTRACTS OF EMPLOYMENT
For this reason, it is normal to send the appointee a second copy of the job offer with a declaration of acceptance at the end of the copy letter, which must be signed and returned to you. f) any terms and conditions relating to hours at work;. g) any terms and conditions relating to:. i) entitlement to holidays (including public holidays) and holiday pay (the details are sufficient to enable the employee to calculate precisely his or her entitlement, including to accumulated holiday pay on termination of employment);. ii) incapacity for work due to illness or injury including any provision for sickness pay; and. iii) pensions and pension schemes;. h) the notice that the employee must give and is entitled to receive;. i) the employee's job title or a brief description of the work he or she is employed to undertake;. j) if the employment is not permanent, the period for which it is expected to continue, or if a fixed term, the date on which it is to end;. k) the employee's place of work or, if the employee is required or allowed to work in several places, an indication thereof and the address of the employer;. l) any collective agreements that directly affect the termination of employment;. m) where the employee is required to work outside the UK for more than one month, the period for which he or she is required to work outside the UK, the currency in which the remuneration will be payable, any additional remuneration payable to him or her is and any benefits provided because the employee is required to work outside the UK, and any terms and conditions relating to his or her return to the UK. It may be that you do not feel the need for a more extensive written contract, in which case this 'master statement', as it is commonly called, including the job offer and other additional terms, is all the employee's written contract and can be used as primary evidence of the nature of the relationship in the event of court or tribunal proceedings.
Updating employment contracts
TERMINATION OF EMPLOYMENT
T ensure that no employee shall be dismissed for a first breach of discipline unless it is a serious breach; It is not enough to prove that there has been a breach of any condition, the breach must be material.
EMPLOYEE BENEFITS AND INCENTIVES
Performance-related benefits are designed to motivate employees to improve their own performance or that of the company. Therefore, such benefits are often contingent on the employee or company meeting certain performance targets.
Pensions
The primary benefits of pension, car and medical insurance all have tax implications for employees and are expensive additions to overhead. Details of stakeholder pension schemes are available from the Pensions Regulator (tel or on its website (www.thepensionsregulator.gov.uk).
Incentives
The introduction of the scheme includes: the selection of one or more registered stakeholder pension schemes; discussing schemes with qualified employees; formal selection of the scheme and provision of contact details of the provider to your employees; arranging the deduction of contributions from the salary of those employees who decide to contribute through you; and sending all employer and employee contributions to the pension plan provider within the set deadlines.
Share ownership schemes
HUMAN RELATIONS
Study the Health and Safety Executive (HSE) management standards to ensure you have anticipated the employment implications. Delay stock option schemes and stock ownership plans until your business matures and the future shape of your company becomes clearer.
Purchasing Guidelines
