< Previous20 Business Link www.blmforum.net FINANCE © stock.adobe.com/Artur 20-23.qxp_Layout 1 06/09/2022 09:33 Page 1www.blmforum.net Business Link 21 FINANCE I t’s a simple process – a seller provides an invoice to the buyer of goods or services and that buyer then pays within the specified time. Yet for thousands of businesses, this seemingly simple transaction is scuppered by late payments. According to research undertaken by Xero, the cloud-based accounting software platform for SMEs, nearly fifty-two per cent of all invoices issued by small businesses are paid late. Perhaps unsurprisingly given the economic uncertainty of late, fifty-one per cent of small business owners said the problem of overdue payments has gotten worse over the past three years. Figures from the Federation of Small Businesses, meanwhile, found that late payments cost the economy £2.5 billion every year. This might become worse in the coming months thanks in no small part to the state of the economy, rising inflation and an overall worsening of many company’s cash flow positions. Invoice financing is the simplest means of releasing cash tied up in a business’s outstanding invoice. In short, it sees a business sell its invoices to a third party who will advance some of the funds it is worth up front for a cut. Thousands of businesses rely on this kind of financing to maintain a healthy cash position, whilst others use it to take back control of cashflow issues stemming from late and unpaid invoices. Perhaps the biggest draw is that businesses can be paid most of an invoice within forty-eight hours instead of the typical thirty-to-ninety-day period. As with all forms of financing, however, there are things to consider – namely the kind of invoice finance a company A culture of late payments The difficult state of the economy has left many businesses with worsening cash flow, which could have knock-on effects on those requiring payment from them. We look at the options available when invoices aren’t being paid on time. 22 Á 20-23.qxp_Layout 1 06/09/2022 09:33 Page 222 Business Link www.blmforum.net FINANCE requires. From invoice discounting to spot factor, there’s different options, so finding the right one is key. It’s also important to look at individual providers themselves, as some will insist on managing credit control themselves which could, understandably, alienate some customers. Combined with small business loans, invoice financing can have a powerful effect and literally keep businesses trading. Invoice financing is far from the only solution businesses can utilise to maintain cashflow. Asset-based finance, for example, is a specialised method of providing companies with working capital and term loans that use accounts receivable, inventory, machinery, equipment and real estate as capital – essentially, any loan to a company is secured by one or more of that company’s assets. This option is commonly used to pay for expenses when there are gaps in a company’s cashflow, but it is also frequently used for start-up financing as well as refinancing existing loans, financing growth, mergers and acquisitions, as well as management buy-outs and management but-ins (more on those later). Although it’s not suited to meet every business requirement, it can prove useful for those that have stretched their credit limits with vendors and reached lending capacity at the bank. Private equity, on the other hand, is where investors provide long-term equity capital investment in a company in return for either share, a percentage stake in the business and, in some cases, a seat on the board. The draw for businesses is that private equity can be used to finance MBOs, or to provide equity capital to support growth plans. Although many businesses might be © stock.adobe.com/doucefleur 20-23.qxp_Layout 1 06/09/2022 09:33 Page 3www.blmforum.net Business Link 23 FINANCE loath to dilute their ownership, private equity does offer a good option of raising capital for businesses that aren’t ready to list on the stock exchange. For those looking for capital quickly, it’s important to bear in mind that securing private equity is often a time-consuming process and securing funds isn’t always guaranteed. Another form of private finance is an angel investor – a high net worth individual who makes use of their own personal disposable finance and defers to their own judgement about making an investment. Angels would normally take an equity stake in a business in return for providing equity funds. As well as capital, angels can also provide valuable experience, knowledge and contracts, making them especially attractive to early stage businesses or smaller businesses looking to scaleup. Every investor is different and will therefore provide differing amounts, but typical investments range from between £10,000 and £500,000, though deals of up to £2 million have been known when angels group together in syndicates. Although angels are one of the most significant investors in start-ups, that shouldn’t deter more established firms from making enquiries. It’s important to keep in mind that securing an angel can be a difficult and protracted process, as well as being harder to research and contact compared with a private equity firm. As we have already explored, capital is often sought to help fund management buy-outs (MBOs) where a company’s management team purchases the assets and operations from the current business owners. From a manager’s perspective, an MBO is an attractive option as it allows them to take the reins and enjoy greater control and freedom owning the business rather than serving as an employee. It’s equally advantageous from a seller’s point of view as it allows corporations to shed non-core divisions or for company owners to retire. A typical MBO will see a management team pooling resources to acquire all or part of the business they manage, and this financing is often comprised of personal sources, private equity and seller financing. A management buy-in (MBI), on the other hand, is where an external management team acquires a company and replaces the existing management team. In an MBO, the management team is a known quantity and therefore has a greater understanding of their business and its employees, but an outside management team will need to become acquainted with a company’s operations, as well as build up relationships with clients and staff. Faced with an end to government financial support schemes, rising energy costs, continuing uncertainty surrounding the Russian invasion of Ukraine and the cost of gas – and all that on top of a worsening late payment epidemic – it can be easy to succumb to doom and gloom. It’s simple to point out what’s wrong, harder to look for workable solutions. Yet seeking financial help and advice shouldn’t be difficult. There’s a plethora of financial experts across our region there to offer guidance and solutions to keep businesses afloat. 20-23.qxp_Layout 1 06/09/2022 09:33 Page 424 Business Link www.blmforum.net OFFICE SOLUTIONS © stock.adobe.com/murattellioglu Ensuring a smooth fit-out Ensuring a smooth fit-out 24-27.qxp_Layout 1 06/09/2022 09:34 Page 1www.blmforum.net Business Link 25 OFFICE SOLUTIONS With many businesses looking to rejuvenate their offices in response to new working habits, forming the right team to ensure a seamless project is key. T he world of work has changed drastically over the past couple of years thanks to the pandemic, which has seen a desire to rethink the office, to repurpose this space to better suit the current needs, practices, and wellbeing of employees, to create a more attractive environment that staff want to be in after many happily completed their roles from home. With hybrid and flexible working styles growing post-lockdowns and being offered to draw in new employees in an ongoing talent shortage and ‘the Great Resignation’, many businesses are thus looking to re-design and fit-out their offices. These alterations are frequently involving reducing the space provided for standard desks in favour of an open plan design with agile areas to anticipate changing needs so staff can better control their environment to their requirements, bolstering productivity and satisfaction. Bookable working spots, specialised task-driven zones and informal spaces - especially collaborative areas as the office becomes more of a place to unite staff and boost company culture, alongside focus spots - are being incorporated for the modern office, while innovative, modular furniture and reconfigurable spaces, with flexible screens for example instead of strict walls, are all being included under new office designs. When reformatting workspaces to create the ideal office for today, business owners and leaders might assume this is a hands off process, leaving it to an office manager and fit-out company. Though this may be true and work fine in some instances, for those who are really seeking to produce a workplace that puts people first, that truly reflects a company’s vision, values, and culture, you will need most of the senior leadership team to contribute to the process, as Blueprint Interiors notes. The workplace consultants and commercial office interior fit-out specialists advise establishing the right team to achieve your aims, and this starts with the internal team to ensure a successful project. With a large number of things to consider when renovating your office, from reconfiguring a new 26 Á 24-27.qxp_Layout 1 06/09/2022 09:35 Page 226 Business Link www.blmforum.net OFFICE SOLUTIONS layout to conforming to health and safety rules, as the firm states, the input and visionary insight from the senior team is “critical” to the workplace consultancy process it follows that defines your fit-out plans from start-to-finish, making sure that the project is running smoothly, on time, and to budget. With this, then, a strong leader is necessary: select a project lead to become the internal point of communication for all project stakeholders as well as for your chosen office fit-out company. This person must have the time to take on this role, which comes as a big responsibility, and the skills and characteristics to help keep things moving seamlessly, including strong organisational, communication, and interpersonal skills and a deep understanding of a company and the departments within it, its values and culture. To further establish the best team for your project one will also need a finance manager, responsible for dealing with the financial side of your office fit-out, from procurement to grants, capital allowances and other government financial incentives such as the super- deduction tax break enabling you to claim against desks and office chairs, computers, associated computer equipment, servers, solar panels, EV charging points and more equipment. Your finance manager will need a keen understanding of the myriad payment, contract, and finance options. Blueprint Interiors also suggests involving a ‘people person’, perhaps from HR or marketing and communications, to be the voice guaranteeing your corporate culture is imbued in all aspects of your new office. This person will additionally oversee change-management initiatives and keep constant communication between wider staff, the internal fit-out team, and the external fit-out company to ensure employees are central to every decision made. Also advised is a specially selected project steering group; those who will take part in workshops with workplace consultancy teams, and report back with information and knowledge gained. Usually incorporating one or two of the aforementioned roles, this group will also involve a select group of other team members. To form the 24-27.qxp_Layout 1 06/09/2022 09:35 Page 3www.blmforum.net Business Link 27 OFFICE SOLUTIONS perfect internal team, choose those with enthusiasm who want to create a great place to work and will become advocates for the project with peers. With a solid team, different ideas on work requirements, budgets, and deadlines can be pooled together for an effective fit-out. With the internal team organised, it’s time to focus on the external fit-out team, consisting of agents, specialists and consultants that businesses themselves do not have. This can involve those to source yourself, and those the fit-out company will provide. Businesses will likely need an external project manager, to help navigate contract and construction law, while interaction with one’s landlord will be necessary if undertaking any serious structural or cosmetic renovations, which may require a ‘License to Alter’ from your landlord. Furthermore, a principle designer is a legal requirement for companies undergoing an office fit-out, to verify that the fit-out company are mitigating the risks to health and safety in the design of an office. This person will visit the office site regularly to establish potential hazards, access restrictions, accident mitigations, et al. Then there is the design and fit-out partner, who will help in every stage of your office fit-out. It is where most of your office fit-out spend will go, so make sure to shop around, look at a company’s past projects, case studies, and reviews to get a sense of their work and request a consultation meeting. Overseeing the work to rejuvenate your office can take significant time and resources, so ensure to also select the best time and set a realistic timeframe to renovate your office to help with this process. Look to minimise disruption to your business, staff, and customers. Before any changes are made and throughout the project, ensure to clearly and regularly communicate with staff, to prepare them for the alterations, and also enable them to help you with their own ideas. While redesigning an office can be a major expense for a company, the right fit-out will increase staff productivity, satisfaction, and improve your brand image. © stock.adobe.com/DigitalGenetics 24-27.qxp_Layout 1 06/09/2022 09:35 Page 428 Business Link www.blmforum.net RECYCLING AND WASTE MANAGEMENT © stock.adobe.com/moodboard 28-31.qxp_Layout 1 06/09/2022 09:36 Page 1www.blmforum.net Business Link 29 RECYCLING AND WASTE MANAGEMENT B usiness accountability and sustainability are fast becoming buzz words. The desire to appeal to consumers with an ethical and environmentally minded approach to business, as well as the potential money saving benefits to efficient running operations and waste management systems are important for all modern enterprises to consider in the face of dramatically increasing material and labour costs. Before delving into some waste management initiatives, it is worth exploring responsibilities that businesses have when it comes to waste management. These can be found on the Government website. Businesses have a responsibility to take reasonable steps to prevent, reuse, recycle or recover waste (in this order). Upon having done this, waste must be sorted and stored securely in appropriate containers for the waste type, with a lid. Different waste types must be stored separately to prevent contamination, thus meaning recyclables cannot be recycled. When disposing of waste, you must ensure that your carrier is authorised to do so (this can be checked via a register on the Government website) and that they dispose of waste via the proper channels. If you suspect illegal waste dumping, it is the responsibility of the business to report the carrier to Crimestoppers. Business waste counts as anything derived from commercial activity. If a business is run from home, then any waste produced there from the business activity is also business waste. Waste is anything that comes from: Construction, Demolition, Industry, Agriculture. Furthermore, if your business deals in waste (transportation, arranging transportation, buying and selling) you must register this via the Government website. Failure to do so could result in a fine of up to £5000. Understanding the rules around waste disposal, we now turn to the benefits of recycling. Recycling business waste can actually save money for the business, as it reduces overall waste management costs. Although recycling can be seen as a large effort, it means that the business can save on landfill tax rates and waste disposal gate fees if the waste can be Recycling is not the optional choice it once was, and a record-breaking heatwave for a summer and fresh governmental attention may mean that getting on top of the issue now rather than later is preferable. 30 Á 28-31.qxp_Layout 1 06/09/2022 09:36 Page 2Next >