Finance Lecture

Lecture with Ian Montcrieff-Scott, business advisor from DeD, on business and finances

at the end of this session we were given a selection of paperwork which gave us more information about the grants and loans. this session was too vague and not necessarily relevant to me, last years session (or two years ago) with Juan on startups etc was a much more beneficial session.

Why could it fail?

·         Competition

·         Complacency

·         Manufacturer/supplier increases costs or collapse

·         Bad reviews

·         Demand decreases

·         Rent increases and sales cannot cover it

·         Poor set up

·         Lack of planning

·         Not enough market research – on the IOM there is only 80,000 people, if the business doesn’t exist it is often because there is not enough demand for it to make it viable.

·         Cashflow – start-up costs, trading (few orders)

Costs:

·         Setting up costs

·         Running costs

Working from Home:

·         Tenancy restrictions,

·         insurance, mortgage – banks dislike it if you start up a new business from home if you have a mortgage as you are deemed less reliable,

·         liability insurance

Types of traders:

·         Sole trader – sole liability, trade under your own name or can go to the registry office is opposite bar George if wanting to trade under a different name.

·         Partnerships – limited by guarantee is more common, joint liability

·         Limited company – two directors, this is separate from us (the sole person) risks are less for shareholders, £100/£250/£500 few to start up. Price increases the sooner you want the paperwork completed. Shareholders can take dividends

Pensions:

Must consider this, don’t leave until later to try and sort this.

Sources of funds:

·         Family and friend’s gifts or loans

·         Shareholders

·         Savings

·         Loans

·         Government grants

Advised to use savings and money that is interest free, certainly don’t use credit cards, as debt could increase if things don’t go smoothly.

 Government grants:

·         micro business start-up, match funding, 5day intense course

·         business funding support – if you can say how your business would help to prevent someone supplying the service from off island then you would appear more attractive

·         Vocational training scheme

·         Green loan scheme

·         Full financial support scheme – employing, manufacturing, export