START YOUR OWN ENTERPRISE Module 5 – Welcome! Tutor:

WELCOME!

GROUP AGREEMENT FOR SUCCESSFUL LEARNING : Generated during week 1 - to include: Attend all sessions on time If running late, inform Tree Shepherd office If unable to attend or leaving early, make arrangements with class colleagues to collect homework/handouts and/or access them online Contribute Complete homework tasks Respect others Eat outside of classroom, except during designated breaktimes Keep learning area clean and tidy Observe health and safety and other TS/venue policies and procedures

Handouts provided and/or online resources COURSE ARRANGEMENTS 4.00 finish 11.15 and 2.45 1.00 - 1.45 Handouts provided and/or online resources Off or silent

GROUP INTRODUCTIONS

REVIEW HOMEWORK: 1)Complete USP on Business Plan 2)Social Media – explain which social media platform is most appropriate for your business and why? 3) WCDI group discussion/feedback focusing on the above

SESSION AIMS: > Personal/business budgeting and cashflow forecasting for a lean business start-up model > Legal structures/compliance > Elevator pitches

BASIC FINANCIAL TERMS (see tablet/website for further financial terms) BUDGET A summary of planned income and expenses COSTS Expenses in producing products or running the business, including the cost of your time FIXED COSTS Expenses incurred whether you trade/work VARIABLE COSTS Expenses which vary according to the amount of work CASHFLOW The movement of money in and out of a business REVENUE How much money you take in from sales before expenses are deducted TURNOVER Same as revenue PROFIT The surplus after you have deducted all costs from sales income

BUDGETING

‘BUDGET’ An estimate of income (revenues) and expenditure (expenses) over time, reflecting a reading of future conditions and goals

WHY A BUDGET IS IMPORTANT To: limit expenditure measure performance plan for foreseeable adverse conditions plan for achieving future objectives determine future budgeting

CREATING A LEAN BUSINESS Start small and grow But make sure you actually Start! Trial things first – then get feedback Only add what you know your customers will pay for Perfect is the enemy of good It stops you doing anything until “its right” And you don’t even know if your customers will like it! The “Lean Start Up” by Eric Ries

CREATING A LEAN BUSINESS Questions: What could you offer NOW? Where would you sell it? Are you ready to listen to what your customers say? How would you measure their response?

CASHFLOW FORECASTING

QUOTE OF THE WEEK - 1 “Business owners are often unrealistic in predicting their cashflow; they tend to overestimate income and underestimate expenses.” Scott Allen

CASHFLOW FORECASTING The movement of money into and out of a business. The cashflow projection helps to ensure that the business has enough money to survive. Review regularly. Do not confuse profit with cash flow!

SIGNS OF CASHFLOW PROBLEMS struggling to pay wages (or yourself!) bill arrears lack of profit no ‘working capital’ buffer lack of contingency funds

WAYS TO IMPROVE CASH FLOW Increase sales Increase price Reduce costs Collect money faster Pay slower Get a loan/overdraft/more investment

– Business Start Up Guide “The legal structure of your business is likely to affect the way your business can raise money and the way management decisions are made” – Business Start Up Guide

LEGAL STRUCTURES see tablet/website for further information

MAIN BUSINESS LEGAL STRUCTURES Sole trader Partnership Limited Company by shares Limited Company by guarantee Community Interest Company (aka CIC)

HOW TO DECIDE WHICH LEGAL STRUCTURE What is the aim/purpose of my business? What is my motivation? What do you want to do with the profit/surplus? How much control do you want (or are willing to sacrifice)? How much help do you need to run the business? How do you feel about taking financial risks? How do you feel about company info being publicly available?

COMPLIANCE Things you must do when starting a business: Notify Job Centre/DSS Register with HMRC Register your company (if limited company) Register for VAT if turnover + £83,000 Other appropriate sector registrations Get a business bank account Get book-keeping/tax advice Take out relevant insurance Set up direct debits for tax , NI, business rates, utilities, VAT Keep strict records of income and outgoings Ensure business registration details on all public correspondence

THE ELEVATOR PITCH A brief persuasive speech to create interest in your business. Should be: interesting, memorable and to the point. Motivation – my vision and personal driver. Market – my customers. Mechanics – what and how I deliver to my customers.

HOMEWORK: Individual homework: HW1: To research the specific regulations on food hygiene, health & safety, waste management, trading licenses. May use the following link: https://www.gov.uk/licence-finder HW2: To have a look at the various company types and choose which may be appropriate for their business idea? https://www.gov.uk/set-up-business HW3: Work out the 5 most expensive items you NEED to start up and how much they might cost? Group homework: HW4: Meet as WCDI groups to focus on the above topics HOMEWORK:

REVIEW OF DAY

TARGETS FOR NEXT WEEK: - Key resources needed for business start up - Budget & cashflow - Fixed & variable costs - Elevator pitches - Generating income

SESSION EVALUATION

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