investor due diligence

4 Steps to Do Due Diligence on a Potential Investor: Credibility and Verification

4 Steps to Do Due Diligence on a Potential Investor: Credibility and Verification

5 Minute Read

investor due diligence

In a recent interview, Starling Bank founder and CEO Anne Boden shared how she once pulled out of a funding deal because it emerged that one of the investors' founders had been involved in a crime.

Look online. There are loads of guides for investors on how to do sound due diligence on a potential investment. But try to find out more about actually checking out your potential investor and making sure their money is clean, and you're likely to have less success.

Investors can, of course, make or break a company. They are the ones who have the deep pockets and they are the ones who can fund your business's growth when you need it most. But, not all investors are created equal. There's risk involved in taking on an investor so you want to be sure that they're credible and verified before committing to working with them.

What do I mean by credibility? Well, this means that their story checks out according to public records and other sources. Do they have a good reputation? Are they known for being honest and truthful?

And what about verification? This means that you should verify their identity with documentation like ID cards or passports before doing any further work together - even if it's just a meeting.

Why is it so important to do this? Because you don't want to be working with someone who's not credible or who may even have a criminal background. It could end up costing you time, money, and possibly your business if things go wrong.

So how can you go about doing due diligence on a potential investor? Here are four steps to get you started:

Step One: Check their Credibility

The first step is to check the credibility of the potential investor. This can be done by first looking broadly at public records. In the UK this might include sources such as Companies House and the Electoral Register, as well as online sources of news and background information. If their story checks out then you can start to build some confidence that they are legitimate.

Step Two: Verify their Identity

The second step is to verify the potential investor's identity by asking for ID cards or passports before meeting with them face-to-face or doing any further work together.

There are a few different ways of verifying an investor's ID. One way is to use credit checking sites like Equifax, Experian, and Creditsafe. These sites will be able to tell you if the potential investor has any outstanding debt or a bad credit history.

Another way is to get ID documents certified by a regulated organisation like a law firm or Dun and Bradstreet. This will help to ensure that the documents are legitimate and that the potential investor is who they say they are. This is especially important for overseas investors where you may not find it as easy to compile a clear credit and criminal record history.

It's always better to be safe than sorry so take your time in doing due diligence on any potential investor. It could save you a lot of headaches down the road.

Step Three: Ask for References and Recommendations

The third step is to ask the potential investor for references or recommendations from their previous work with other companies or investors. This can help you feel more confident about your decision on whether to enter a partnership with them, especially if they have a lot of good reviews online - although this isn't always the case.

Do your own research too. Ask around - see who knows them, what they have to say. One particularly eye-opening step is to speak to others who have worked with them (you could even ask them to share references from others they've invested with), to see what they have to say about the record and manner of your would-be investor.

Knowing how they've conducted themselves with others like you will tell you a lot about who you might be climbing into bed with.

Step Four: Interview your Investor

It might seem obvious but actually talk to your would-be investor about their background, their ideas, and what they hope to achieve. This will help you get a better sense of who they are, what their goals are, and how they plan on helping your business grow.

Does your idea or business model fit well with theirs? Do you have complementary aspirations, products, or skills? If in doubt, ask for more information, ask to meet key members of their team, and air your concerns. Just like a job interview, deciding to take on investment is a two-way street and you've likely poured too much time and energy into your business or idea to risk jeopardising its success by choosing the wrong backer.

Remember that a good investor is often one who has the right amount of altruism and ego to invest in your company, not just because they think it's going to be profitable but also because they share your vision for success.

Conclusion

In the end, you want to make sure that any potential investor is credible and trustworthy. The most important thing in due diligence is your gut instinct. If something doesn't feel right about a person or their business, don’t move forward with them as an investment partner even if they have good references from others who've worked with them before. The right backer is worth waiting for and won't mind cooperating with you so don't be afraid to get this right.

If you have any questions or would like to share your thoughts on this topic, please get in touch!

Entrepreneur

10 Startup Mistakes Every Entrepreneur Should Avoid

10 Mistakes to Avoid When Starting a Business

5 Minute Read

Entrepreneur

So, did you know that 9 out of 10 startups fail?

This isn't necessarily surprising when you consider the huge surge in the number of younger people starting their own businesses.

Although a high statistic, it's also never been easier to start-out on your own in business, be your own boss and reap the rewards of your own endeavours. There are plenty of steps you can take to ensure your new business thrives and you succeed in the way you might have dreamed.

No one ever sets out to fail when they start their own business. But unfortunately, many startups make the same mistakes over and over again. Below are the top reasons for start-up failure, and how you can ensure you don't make the same mistakes.

1. Not having a plan for your product

This is one of the most common mistakes that startups make. Without a solid plan in place, it's nearly impossible to create a successful product. You need to have a clear idea of who your target market is, what features you want to include in your product, and how you will differentiate yourself from the competition.

2. Doing your research

This mistake goes hand in hand with not having a plan for your product. Before you even start developing your product, you need to do extensive research on the industry you are entering and the competitors you will be up against. This information will help you make better decisions about your business, and it will also help you avoid making mistakes that have already been made by others.

3. Not allowing room for flexibility

While it's important to have a plan and stay organized while you're developing your product, flexibility is also key. You want to make sure that you give yourself enough time for changes and improvements along the way, because there will always be something new to consider or adjust as you go through different testing phases with users.

4. Not offering a product or service that stands out

One of the main reasons that startups fail is because they are not offering a product or service that stands out from their competitors. If you aren't differentiating yourself in some way, it will be extremely difficult to get users and customers to pay attention long enough for you to make an impact on them. You need to bring your A-game when it comes to your product and its marketability.

5. Pricing too high or too low

Pricing is another common mistake that startups make. If you set your prices too high, people will be reluctant to buy your product, and if you set them too low, you will not be making enough money to cover your costs. You need to find the right balance between what you are charging and what the market will bear.

The number one reason that startups fail is because they run out of money. There are a few ways to avoid this mistake, such as starting with low overhead and finding a co-founder who has experience in finance or accounting. But whether you go at it alone or not, make sure your business model includes a solid plan for making money.

6. Not sticking to your budget

This is another mistake that can easily be avoided. Make sure you set a budget and stick to it, so you know exactly how much money you have to work with and where it is all going. This will help keep you from overspending or underestimating the costs of starting your own business.

7. Reluctance to get feedback and criticism on prototypes

This mistake can be a little more difficult to avoid, especially if your idea is something you've been thinking about for a long time and it's really close to your heart. When sharing prototypes with users or potential investors, the feedback that they give will help shape and improve your product so that you have the best chance at success. But many entrepreneurs are so attached to their ideas that they ignore what others have to say about it. This is a huge mistake, because feedback and criticism are necessary for creating an effective product.

8. The market might NOT be ready for your product

One of the most common mistakes that startups make is thinking their idea will change the world, when in reality it might not be ready for mass consumption. While you are busy creating your product and perfecting its appearance, functionality, price point, etc., there are people who have been following trends in your industry for years. These experts know what usually works and what doesn't, so it's important to pay attention to their insights before you put all your eggs in one basket.

9. Employing a weak team, and using poor leadership

Make sure you have the right people in place, with the skills and experience necessary to help your business succeed. Focusing on recruiting committed employees, instead of top talent who will fly to the next offer very soon is crucial. You want people who see your vision and inspire along the way as well. And don't forget about leadership - it's important to have a strong leader who can make the necessary decisions to keep everyone on track.

10. Poor marketing (and/or sales)

Last but not least, this is one of the most common mistakes made by startups. If you don't have a successful marketing and sales plan in place for your product or service, it will be difficult to break through the noise and get people talking about you. You need to invest some time into creating an effective advertising campaign that gets results - whether that means generating leads, creating a brand identity that people can get behind, or simply getting your product in the hands of more people.

These are just a few of the most common mistakes that startups make. By avoiding these errors, you will give yourself a much better chance at success. Make sure to follow a detailed plan and find ways of differentiating yourself from the competition so that your business stands out as an industry leader instead of one of many new companies struggling for attention.

Need help writing a Business plan? The Mushroombiz Team can help!

customer service

What’s the key to a quality caller experience?

Wot d’ya want m8? How to nail your company’s caller experience

5 Minute Read

customer service

When working for a former employer, I used to phone through to our head office from my satellite depot and ask to speak to certain colleagues. The person on the switchboard would often start transferring my call before I had even finished speaking, and would never retrieve the call to take a message if the person I asked for didn't answer. It was infuriating.

One time I even said that I wanted to speak to a particular individual and was about to ask her to check if they were available before releasing the call. Even then, I was too late and before I knew it I was back at another answerphone. This call handler worked for the same company as me, but I knew that many of our customers and other valued callers were no doubt getting the same bad experience.

The way your staff conduct themselves when answering your business calls speaks volumes about the way you value the interactions with your stakeholders. Get this right, and that positive caller experience can be the start of a wonderful new relationship. Get it wrong, and the caller is just one or two clicks away from a poor Google or Trustpilot review of your business.

So what does take to delight your callers? How can you make sure that every caller receives a first-class experience and becomes an advocate of your business rather than a critic?

1) It all starts with good planning

Consider the kinds of calls you're likely to get. Think carefully about the reasons people call you, the information you need to ask them for, what you want to say to them, and who to transfer their call to. Are your calls mainly new sales enquiries? Make sure your call staff know how to qualify those callers. What contact details will your teams need to follow up on your caller's request? What response times can the caller expect?

Also think carefully about your brand and your values. Consider the tone and style of your business and what you want callers to remember about their interaction with your company. A lot of differentiation can be achieved here. What works for the booking line of a cool wine bar won't necessarily resonate for callers to a high-end tailors on Saville Row. Think about whether you want your staff to answer calls with a friendly and casual "Hey, what's up?" or a traditional and professional "Good afternoon, how can I help?"

2) Set a clear protocol

This includes everything from determining who's answering calls and when, through to whether callers are being transferred to the intended person or messages taken and passed along. This will depend to some extent on your phone system capabilities.

Make sure your phones are adequately staffed for the volume of calls you receive and make sure you have some part of the protocol that deals with the unexpected. For example, have an escalation process so your call handlers know who to contact if some kind of emergency comes through on the phones that they're not clear on how to handle.

3) Equip your call staff

There's nothing worse than giving outdated information, especially when the people answering your phones can be your greatest ambassadors if they're equipped to convey helpful and current information. New staff recently joined? Make sure your call staff have their extension numbers. Got a new offer people might phone about? Let your handlers know how to direct those calls. Server down? Make sure they know what to say about possible delays. The better the flow of information you can give to the front-end of your business, the better the caller experience will be.

4) Set out to help

It may seem obvious, but it's in your interest to help people who call your business, whoever they are and whatever they want. Provide as much helpful information as you can without being overwhelming. Sometimes people just need a little more information to fix a problem, and being forthcoming with the right details always leaves a better taste in the mouth for your callers than if you're reserved or coy.

Ask questions to help the caller solve their problem before providing any solution. It's natural for people to feel frustrated when they're calling a business, and any inquisitive questions can make them feel like you care about their problem and that you're going to do your best to help them out.

Asking your callers if they agree with what you've suggested is a great way to show that you're listening. It's also an opportunity for them to give feedback about what kind of help they need, so make sure your staff take the time to confirm their agreement before moving on in your conversation with them.

5) Instil a culture of ownership

For me, this is the make-or-break part of any caller experience. Just like with my former employer, I hate phoning any company where it isn't clear if the person on the other end of the phone is taking personal responsibility for my need.

At Mushroombiz, we've hammered home the message of ownership for this exact reason. Let's be honest, which would you prefer - an individual who listens carefully to your enquiry or concern and commits to personally helping you to connect to the right person, or someone so keen to get off the phone that they don't care that you're going to have to call back anyway?!!

Train your call teams to take ownership of the needs and problems of people who call. If they can't reach the right person through the switchboard and the caller's need is urgent, empower staff to find an answer by phoning another colleague or sending an urgent message. Callers should go off the phone feeling confident they won't just be forgotten as soon as the line goes dead. Call staff should go off the phone and do exactly as they committed they would. This is what cements the perfect caller experience.

Nailing your customer experience can be the difference between winning new customers and alienating people from your brand. The way in which calls are answered, transferred or directed is all part of a bigger picture that tells people if your organisation is worth doing business with. The tips we've provided should give you a starting point for delighting every caller and leveraging the value of your brand to turn them into loyal customers.

If you're looking for more ways to improve your caller-experience, we've got plenty of know-how to help! From maximising new business from phone calls to dealing with difficult customers, get in touch today to get help from Mushroombiz.

company property

How do I enforce the return of company property?

How do I enforce the return of company property?

5 Minute Read

company property

Unfortunately, this can be quite a common situation for many businesses. Particularly as more employees than ever before are working away from the office, either at home or remotely. The concern here is for the price of IT equipment and also protecting confidential information and your business.

So what can you do to make sure you get your company property back?

1) Make it clear in the employment contract

The usual case is that an employee is leaving the company and you require them to return equipment you’ve provided them for doing their job. But this isn’t always the case and you should have a clause in your contract that ensures you have the right to request the return of company property at any time.

Also define what you consider company property to be: for example, mobile phones, laptops, passwords, keys, and client files. Specify that items must be returned in good condition with an awareness that there is a difference between reasonable wear and tear to negligence.

It is also important to consider what the consequences are for failure to return company property. Normally, this is a clause in the contract allowing the employer to make a deduction from an employee’s payslip for the cost of items that have not been returned. However, this right should be exercised with caution and only as a last resort.

2) Keep a record

It is always a good idea to be aware of who has what. This can also be useful for identifying the age of items and when they might need to be replaced or maintained as well as who needs what, what’s kept in the office, and what employees can take home with them.

This doesn’t just apply to IT equipment, but also to keyholders and password holders to client or internal accounts among other records necessary to be kept.

Also keep a record of the receipts and costs of each item to evidence when required the value of the items should you need to reclaim this.

3) Have the arrangements of any notice periods in writing

Have a written record of any arrangements for the end of the employment, however caused. This also reduces the risk of understanding and gives the employer the opportunity to highlight points in the contract. Make clear what needs returning, when by, how it needs to be returned, who or where to, and by what date.

4) Set a deadline

This should normally be the employee’s last working day however some flexibility may be needed where the employee works remotely. This also makes any failure to return items easier to deal with.

Equally, this event may not always be triggered by an employee’s departure. In any event, it would be unreasonable to give no notice of company property needing to be returned, particularly physical items, needing to be returned.

5) Good IT systems

In any event, it is crucial to make sure you can limit or disable employees’ access to systems when you need to, particularly where there is a dispute about items being returned. The data held on an employee’s company laptop after all can likely be more valuable than the laptop itself.

6) Be clear on consequences

Clarity is essential here at each step. Just as an employee needs to be aware when and how they need to return company property, if they fail to do so they need to be clear what will happen next. Communication is key. If an employee does not make the deadline do not automatically deduct the value of the items from their salary. Ask them why and tell them what will happen if the next deadline is not met. It is important to tread carefully: remember that wrongful payment of wages is a breach of contract and it does not matter how long the employee’s service is to make a claim to recoup this.

Get more valuable HR insights from a Mushroombiz professional here

Manufacturing

How to get paid on time for your manufacturing business

How to get paid on time for your manufacturing business

5 Minute Read

Manufacturing

When it comes to cash flow, running a manufacturing business requires a steady hand on the tiller. Raw materials, components, machinery, and freight all cost money. Suppliers won't supply if they're not getting paid and customer orders can't be fulfilled without that supply.

Cash flow is crucial for any business, but manufacturers are particularly vulnerable because it's often only when the goods are actually delivered that they start generating income. For many small manufacturers who sell directly to end-users, the cash from those sales can take a long time to filter down.

In addition, as well as having to fund daily expenses such as payroll and suppliers' bills, manufacturers have high capital costs for machinery and equipment which must usually be paid up-front before they generate any income.

So if a customer hasn't paid on time, you could be waiting a long time for the cash to come in, creating a ripple effect throughout your entire business, which can be extremely damaging, particularly if you're relying on that money to pay other bills and salaries, or fund investment or other manufacturing work so that production doesn't slow down.

What can you do to improve cash flow? This blog looks at some of the ways manufacturers can improve cash flow and ensure they get paid on time.

 Preventative Steps

  1. Ensure your contracts are set out very clearly stating what your payment terms are, the consequences of late payment, and the remedies and "compensation" you would reasonably expect in a situation of late payments.
  2. Ensure in the customer onboarding process that you perform a company credit search, identifying the risk of late payment. There are many providers out there and at Mushroombiz we have our recommendations.
  3. Make sure you differentiate credit terms to different customers based on your due diligence (company credit search). For example: if a company has a high risk rating, specify payment terms in advance or within 7 days (depending on your commercial objectives). If they are lower-risk then you will have more confidence in offering 14 or 30 days payment after the invoice date.
  4. Make sure this is well communicated and dovetailed to your sales strategy - there is nothing worse than poorly communicating serious commercial points. Manage expectations.
  5. We recommend having all of the credit control paperwork (reminders, chasers, phone scripts, and letters before action) prepared so you can run an efficient process without wasting time when you need the money.

After the invoice has been sent

  1. Be proactive - call and email after you have sent the invoice to confirm your customer has received it.
  2. Monitor the situation closely and make sure your scheduled reminders are sent out, some accounting software includes automation (but don't just rely on this).
  3. If you are in a supply-chain-sensitive industry (like manufacturing) be sure to understand any industry-wide problems such as shipping delays.

When the payment is late

  1. Get in contact straight away - phone and email
  2. If the customer is experiencing difficulties paying (they have said this or it may be implied) offer a way to part-pay immediately or create a payment plan so that you have done everything in your power to reasonably resolve the issue.
  3. Chase follow up - phone and email
  4. If the payment plan is missed or there has been no response, apply late-payment interest to the payment.
  5. If it is not paid within 30 days of your invoice date, you are now entitled to use debt collection agencies - do so.
  6. Using this tactic will normally yield a much higher success rate than chasing manually or through an accounting software reminder.
  7. Debt collection companies have the power to charge interest on the invoice debt in accordance with the Commercial Debts Act 1998.
  8. Begin looking at a debt recovery process.

So don't sit back. Get control of your cash flow by running a structured, organised and efficient credit control process that brings you your money sooner and keeps your manufacturing business making money!

Find out more about honing your credit control process or chasing an outstanding debt by getting in touch with a Mushroombiz specialist.

virtual pa

How a virtual PA will save you hours per month

How a virtual PA will save you hours per month

5 Minute Read

virtual pa

No matter what your business, whether you’re a sole trader or a large team, you will have paperwork to deal with and admin to organise.  You may prioritise getting clients/sales and doing your business, but this paperwork is a vital part of your business too.

But what if you:

  • Aren’t a fan of admin?
  • Would rather be doing something else?
  • Struggle for time?

A virtual assistant isn’t the same as Siri or Alexa.  They’re not there to play your favourite music or check the weather (necessarily). But today’s technology does allow a real person working from a remote location, usually their home or office, to help support you and your business.

A Virtual Assistant may seem like a luxury but can actually be surprisingly cost-effective and can benefit you in many ways.  Think about it.  If you could easily delegate certain regular tasks, what would your week look like?

You could:

  • Increase income because you have more time getting more clients/sales.
  • Be more productive because you are more focused on the tasks that excite you in your business.
  • Reduce your stress levels and increase your well-being if you’re struggling to juggle work, family and leisure interests.

How much time do you spend each day/week on the following:

  • Checking and sending emails?
  • Making/taking telephone calls?
  • How many are spam?
  • Planning meetings/travel?
  • Organising insurance renewals?
  • Filling in spreadsheets?
  • Preparing/formatting documents?
  • Drafting letters?
  • Preparing invoices/quotes?
  • Chasing customer payments?
  • Researching?
  • Managing projects?
  • Procrastinating?
  • Getting distracted?

Do you have a separate work phone or do you use your personal one?  How often do you hear a ping on your phone and check to see if it’s an important email but then get distracted because you got tagged into a post on Facebook? Then while you’re there, you have a quick scroll down to see what everyone has been up to at the weekend?

How many phone calls do you take each day? How many of them are spam and disrupt your train of thought in what you’re working on?

What about meetings?  How many face to face meetings do you attend?  Do these meetings require you to plan travel, parking?

Do you tend to renew insurance policies or service renewals without researching for alternatives (and thereby maybe paying extra) or do you take the time to get new quotes for each?  Whether it’s your car, property, public liability or travel insurance, it all takes time.

How up to date are your IT skills?  You may have done IT as a degree module at university or taken a European Computer Driving Licence (ECDL) a few years ago but with technology updates happening constantly, how quickly can you prepare or format a spreadsheet, report or presentation with the latest version of software?

Getting money into your business is essential but the administration of it can easily be handled by a Virtual Assistant, whether it’s preparing your invoices/quotes or handling credit control.  A good PA may also be trained to use accounting software such as Xero, where repeating invoices can be easily set up, saving even more time.

A Virtual Assistant can also help make you more time by automating regular tasks with things like email responders and appointment schedulers to make sure routine things happen without any ongoing effort.

As mentioned previously, it’s easy to get distracted or interrupted by a phone call or email but what about procrastination?  How often do you spend procrastinating about a task that you know needs to be done but you’re just not looking forward to doing it?  Instead, could you delegate it to a Virtual Assistant?

If you need help in several areas of your business, you can choose to use more than one PA.  Or you could use an organisation that offers Virtual Assistant Services.  The latter may suit you better because you have access to support from a whole team of people, therefore you get a wider range of skills and experience for the cost of one assistant, plus you are assured continuity of service regardless of holidays or sickness.

For the solopreneur with a long to do list, you might feel you haven’t got time to train anyone to handle these tasks or that it’s easier to just do it yourself.  It is true that in the short term you would need to allocate time to ‘handing tasks over’ but then your time would be saved.  Initial investment for a long term reward.

Another concern may be that of maintaining quality.  A good Virtual Assistant will make your business look good.  They’ll have the same work ethos, communicate in the same way that you would and be professional in every task they carry out.  They will be an extension of you. It is possible to ask a Virtual Assistant to do a test piece of work for you to ascertain your confidence in them and their work, or you could delegate a few tasks initially and then increase the workload over time.

Does no one want a job? How to attract top talent in a competitive climate

Does no one want a job? How to attract top talent in a competitive climate

5 Minute Read

Recruitment

In this article, we look at ways you can get noticed and attract talented staff amid fierce competition and a shortage of candidates.

I was sitting in a recent Greater Birmingham Chamber of Commerce winter presentation and I was shocked at just how bad the labour shortages are right now. In Greater Birmingham alone, 57% of businesses have tried to recruit new staff in the last quarter, with 62% reporting problems getting people through the door.

COVID-19 has awoken many to the merits of enjoying a better work/life balance, avoiding burn-out and the desire to be more discerning in their choice of employer - resulting in a general demand for better pay, flexible working and added value beyond a steady income and job security.

With competition to hire talent super high right now, it's not enough to just offer a job. Companies who only go through the motions with their usual recruitment process are going to struggle and those doing something different can gain an edge.

We consider some of the ways businesses can stand out from the crowd and successfully recruit great talent.

1) Get your branding right and articulate purpose

Firstly, consider your branding and online presence, just as you would when promoting your business to customers. You want to make sure you are portraying a positive image as this will help with attracting talent, as well as convincing them they should work for you.

Be sure that your own branded assets (e.g. your website & social pages) are coherent and consistent and give potential candidates (not to mention potential customers) a good impression. Great branding also reflects the values and mission of your business, which great employers will ingrain throughout an organisation.

Also check what other information about your business exists online. When it comes to promoting a job vacancy, while Indeed is great for getting out to a large candidate pool, bear in mind that Indeed reviews are only a click away - if your company has a bad rep, it's going to turn-off potential candidates.

With competition so high, it's also more important than ever to make sure your job ad is engaging and the job purpose clear. Why should candidates work for you? What will they be doing? How will they be contributing to the mission overall and what are the professional opportunities for them?

There's no point advertising if the job isn't appealing or you look like an unprofessional company, so take some time making sure your company and your vacancy look enticing before investing money in paid ads.

2) Consider the salary and benefits proposition

Salary range:

There are pros and cons to including a salary range in your job ad.

If you leave the salary range out or make it too broad, candidates may feel they are not being taken seriously. If the range is too narrow and doesn't reflect current market rates or what your company can afford to pay for the role, then again this will put people off applying - even if there's a chance of negotiating salary later on in any event.

Job ads with a carefully considered salary range generally tend to get more clicks than those without, so it's worth thinking this through in advance.

Benefits:

Specifying the benefits package helps to paint a picture of what you offer beyond just salary.

And remember that this is not necessarily an expensive perks scheme - does your company have free parking? A Friday social with drinks and nibbles? Promote flexible and remote working practices? An office dog? This can make you stand out from the crowd and give a glimpse of your culture, which is important in attracting the right talent.

3) Don't confuse job ad and job description

True, your job ad should give candidates an idea of what the role involves. But it's not there to give them every single detail. Like any advert, the purpose of your job ad is to entice the right audience and increase the chance of quality candidates clicking on it.

Remember it's not a one-way process, and you (just as you would in the interview process) will be selling the company to them as they need to sell themselves to your company.

By all means give interested candidates the option to request the full job description once they've digested your ad and formed an interest in the opportunity.

4) Diversify your recruitment methods and platforms

Don't stick to a single recruitment method or platform. For example, try posting or advertising on social media on top of your usual job sites. Also explore different job sites and consider which are best suited to your industry (for example, you might find that Linkedin works really well for sales roles).

5) Streamline your selection process and save everyone's time

Be transparent up-front with candidates about what your selection process entails.

Anyone who's ever spent time job hunting will tell you how arduous and frustrating a long, drawn-out interview process with no end of skills tests and time commitments can be, especially if the end result is that they don't get the job.

A more intensive process might be necessary for key strategic roles, but keep in mind that the more hoops you make candidates jump through, the greater the risk that they'll pull out of the process or (especially if they're a strong candidate) get another job before you're ready to make an offer.

Be clear on how long each stage will take, as well as if there are any additional steps that you need them to take, such as filling in further documents or completing a test.

You can also use tech automation, such as a tracker to keep track of your candidates' applications. This way you'll have all the information about interest levels, milestones achieved and contact history in one place - which is great for time management as well as candidate engagement.

Having this level of transparency not only helps get through any bottlenecks or common sticking points quickly but it also gives you valuable insight into how many candidates are looking at your job ads, what they're interested in and their background.

Need help with your attraction and retention strategies?

Cryptocurrency

How to handle your Crypto for your Self-Assessment Tax Return

How to handle your Crypto for your Self-Assessment Tax Return

5 Minute Read

Cryptocurrency

The Crypto boom has been a big talking point for the last few years and it doesn't seem to be going anywhere anytime soon. If you're an individual that's made money from Crypto, then we want to offer some insights on how to manage and report your income. The deadline for self-assessment is fast approaching so here are some things you should know as well as what you need to do if you've invested, traded or sold Cryptoassets in the UK.

This article is for individuals that own sell or generate income from Cryptoassets and does not relate to companies.

This blog was published on 25/11/2021 and is relevant to the 2020/2021 Tax Year.

Ethereum, Bitcoin, Doge, Ripple - are they treated the same?

Cryptoassets is a HRMC, FCA and Bank of England definition that brings all types of crypto tokens under one definition. Utility Tokens, Security Tokens, and Payment or Exchange Tokens are all considered the same type of asset for the purpose of taxation. This is because they are all "cryptographically secured representations of digital value".

(more info on this can be found on on the Cryptoassets Task Force (CATF) report here)

What taxes apply?

Three types of taxes apply for Cryptoassets - Capital Gains Tax (CGT), Income Tax and National Insurance Contributions.

Cryptocurrency

Capital Gains Tax

The clue is in the name, but the CATF scope of cryptoassets mean that the most common tax that applies to individuals is Capital Gains Tax.

For the Self Assessment due on 31st January 2021 (covering the Tax Year between 6th April 2020 - 5th April 2021), you will be required to pay either:

10% if you are a basic rate taxpayer; or

20% if you are a higher or additional rate taxpayer

When and how is CGT applied to your Crypto?

In all CGT situations, the person, the asset and the method of disposal (selling, gifting and other methods) need to be qualified (defined by HMRC as "chargeable").

The person (you, the individual) and the asset (cryptoassets) have been covered, so what about the disposal? When does it become chargeable?

The obvious method of disposal is when you sell your cryptoassets on an exchange in return for British Pounds (GBP).

For example, Jo bought Bitcoin at £50 and sells it on Coinbase for £45,000, assuming Jo is a Basic Rate taxpayer, has used her allowances and has no expenses relating to the sale, Jo makes a capital gain of £44,950 (£45,000-£50) and will need to pay 10% on this profit and will need to pay HMRC £4495 in tax.

This is the obvious example, but if you are exchanging one token for another, how do you work out the gain? Wait I have to pay CGT on it?

For example, buying Ethereum with Bitcoin on an exchange would incur a CGT liability as they can both be classed as cryptoassets.

HMRC's cryptoassets manual has outlined that exchange between different cryptoassets could attract Capital Gains Tax liabilities in certain instances where the value appreciates between the point you bought Token A and the time at which you exchanged it for Token B.

In addition to exchanging one token for another, gifting crypto like gifting other assets can also attract Capital Gains Tax.

Income Tax & National Insurance

While CGT covers most selling events concerning crypto, you are required to pay Income Tax and National Insurance Contributions in two circumstances:

  1. if you receive cryptoassets by an employer as a form of non-cash payment; and
  2. for mining, transaction confirmations or airdrops.

There is also a case for applying Income Tax to the buying and selling of Cryptoassets at a frequency high enough to be considered financial trading akin to trading shares on the markets. If HMRC agree that the individual is trading rather than investing then CGT would not apply on the trading activity of the relevant crypto assets. Details on this will not be covered in this article due to the complexity and the need for anyone reading this to get professional tax advice.

How can I reduce my tax liabilities on my crypto?

  1. This is where we repeat the disclaimer at the beginning of this post - Cryptoassets are complex and if you do not have professional tax advice, it is advised that you seek help from someone who knows what they are doing, we do but this blog isn't tax advice.

As with all CGT and Income Taxes there are allowances, and you can also claim expenses against the Income or Gain.

For Capital Gains Tax

You have an allowance of £12,300

You can claim expenses for fees on exchanges like Coinbase and Kraken and costs on mining activities (you can find more information on HMRC's Cryptoassets Manual)

For Income Tax

You have an allowance of £12,500

You can claim expenses on mining costs and appropriate costs to "miscellaneous income". This means that any costs of earning crypto via certain types of airdrops, crypto trading and mining that are legitimate and reasonable in the opinion of HMRC can be claimed. This is complex and subject to change as the world of Crypto evolves and HMRC's tax rules. Again please refer to HMRC's cryptoassets manual here.

If you want to speak with an expert today, get in touch via our website.

Find out more about how to file your own self-assessment with this handy blog from Mushroombiz:

claimable expenses

What expenses can I claim for on my self assessment tax return in the UK?

What expenses can I claim for on my self assessment tax return in the UK?

This article will help explain the tax-deductible expenses you might have forgotten to mention.

5 Minute Read

claimable expenses

You can save money on your tax bill by including the right deductions for claimable expenses incurred in the course of doing business, and you might be surprised at what you can include.

 

For example, did you know you can claim tax deductions for:

Business mileage allowance: You may be able to claim tax-deductible expenses if you use your own car or a company vehicle when traveling on business. If you're self-employed HMRC recommends that the cost of using your private car is covered by an allowance per mile travelled at 45p (up to 10,000 miles in the year, with a reduced rate above this), rather than claiming tax-deductible expenses for actual costs.

Working from home allowance: If you're not office-based as part of your role, then tax-deductible expenses for working from home may be allowable. You can only claim tax deductions for the costs that are directly related to using a workspace in the home used exclusively and regularly for business purposes, such as a room set up with a desk and chair. If you dedicate a specific room in your home as your workspace, you can in some cases claim the exact extra costs for using that space for work (e.g. the additional cost of electricity or heating).

If your employment status is ‘office based’ (for example, you regularly use an office at the place of business) or you're visiting clients as part of your role, then you cannot claim tax deductions for your home.

Subsistence: You can claim tax-deductible expenses for the cost of lunches you have bought while out and about on business. HMRC suggests that tax deductions cannot be claimed if you buy your lunch from home before going to work, or stop off at a restaurant en route. You can though claim tax deductions for the cost of lunches you have bought while out and about on business if they are a necessary element of doing your job, such as when working out of the office with colleagues or clients. You cannot claim tax deductions for taking a client to lunch purely because it is convenient or more pleasant than eating alone in the office canteen.

If you're hosting a company visiting from outside the UK, tax-deductible expenses can be claimed for the cost of food and drink directly attributable to entertaining overseas clients or business visitors. You cannot deduct tax on an evening meal if it has been provided free of charge as part of your tax-deductible entertainment expenses. Food and drink expenses for hosting a UK-based company are not tax-deductible.

Training costs: You can claim tax deductions for costs incurred when you're training to do your job well and to keep up-to-date with changes in tax law or industry practice. You can include costs you incur when taking part in external conferences or seminars.

Subscription fees for maintaining relevant professional memberships are also claimable.

Conclusion

Your tax return is one of the most important documents you’ll fill out each year and it directly impacts the money you have in your back pocket. That's why it's so important to ensure every claimable expense is included in order to save money when filing your self-assessment.

We've outlined above some of the main and most common expenses you can claim, but there are also plenty more job-specific expenses, such as protective clothing for tradespeople and even costumes for actors!

Our advice? Do your homework, check what you can claim (and what you can't), and keep good records as you go along - trust us, it will make it that much easier to pay less tax if you've got a record of what you've spent and when!

20% OFF No Code Needed self assessment

Offer Details:

  • Get a hassle-free quote for your Self-Assessment due January 31, 2022
  • Sign up and get 20% off next year's return 

Find out more about how to file your own self-assessment with this handy blog from Mushroombiz:

tax return

How do I prepare my own Self-Assessment Tax Return?

How do I prepare my own Self-Assessment Tax Return?

5 Minute Read

Self Assessment

How do I prepare my own Self Assessment Tax Return for 2021?

 

If you're self-employed in some form, you know the drill. The time is looming to get your tax return done, so you can pay what’s owed and file on time. It's tedious work with a lot of calculations - all while trying to keep up with the day-to-day running of your business. It’s easy to put it off, but all the time you do, you risk cutting it too close, leaving too little time to be tax-efficient with it, and running the risk of incurring late filing penalties.

Self Assessment covers your income from all sources, including self-employment, property, capital gains, savings and investments – including income from abroad – plus employment earnings if applicable. The more complex your income streams, the greater the opportunity to optimise your tax position and minimise what you have to pay. It’s time-consuming, but well worth doing properly.

Do yourself a favour and take advantage of our FREE self assessment starter service - plus get 20% off next years return when you file with Mushroombiz!

20% OFF No Code Needed self assessment

Offer Details:

  • Get a hassle-free quote for your Self-Assessment due January 31, 2022
  • Sign-up and get 20% next year's return 

Planning on filing your own self assessment? Below are some handy tips from the Mushroombiz Team to help you get the best from your 2021 tax return.

 

 

  1. Register for a Unique Tax Reference (UTR) Number. You need to register before the deadline. To submit your self-assessment for the financial year to 5th April 2021 (which is due 31st Jan 2022), you need to have registered for a UTR number before 5th October 2021. If you’ve missed this deadline, don’t panic, just give us a call because we can usually help.

 

  1. Setup a login with HMRC’s online Government Gateway. Once you’ve applied, HMRC will send you an activation code to the postal address they have on file. It might sound obvious, but do make sure your address is up to date! Also, the activation code is only active for 28 days, so make sure you use it in time.

 

  1. Consider your income streams carefully – for example:
    • Employment income – if you’ve had say 3 or 4 different employers during the year, do you have all the required P60s or P45s for these employers, which will give you your year-to-date tax, salary income and student loan deductions? If you’re missing a P45 or P60, your best bet is usually to go back and ask your employer to provide one.
    • Dividend income – Do you have a breakdown of the total value of dividends you’ve drawn during the year? Make sure you have the dividend vouchers for each in case HMRC check and ask for them. The total dividend figure for each company you’ve worked for should be included in your self assessment.
    • Self-employed (sole trader) income – make sure you have a breakdown of all your self-employment expenses and income. It’s really important for expenses that you have sufficient evidence to back them up - if HMRC comes calling, they will want to see the evidence. If you’re missing an invoice for an expense, you can always request a new copy from your supplier. If you have more than one business as a sole trader, you will need to provide a separate income and expenses breakdown for each one. Certain expenses may be capital items (such as a laptop or a new van) which have to be treated a bit differently, as capital expenditure on your balance sheet, in which case capital allowances will be applicable.

 

        Additional circumstances to consider when filing...

 

    • If you’ve sold a business asset (such as a rental property or shares in a business), there are probably Capital Gains implications. You must make sure you complete the Capital Gains section of the Self-Assessment carefully. You’ll need to have a full record of the transaction, such as a property Completion Statement or proof of share sale, to satisfy HMRC.
    • If you’ve used your own vehicle for business mileage, you can claim back the fuel costs as an expense, which will reduce your taxable profit (subject to certain rules).
    • If you’re contributing towards a private pension pot, make sure you have a breakdown of your contributions for the full tax year. This is important, as it can reduce your tax liability.
    • If like many you are still repaying that pesky student loan, make sure you complete the student loan section of the self-assessment. HMRC will use this to calculate what repayments need to be made for the year in question.
    • If your profits are under the taxable income threshold for National Insurance Contributions (NIC), you won’t have to pay any Class 4 NIC, however you can still voluntarily pay Class 2 NIC, to stamp your eligibility for state pensions for the year. Class 2 NIC must be calculated manually.

 

  1. Don’t forget to save! If you‘ve made mistakes, you can go back and change what you’ve included right up to submitting the return, but the last thing you’ll want to do is lose what you’ve already filled-out just by forgetting to hit the save button.

 

  1. Check the draft calculations generated by the system once you’ve added all your information. It can be all too easy to add an extra 0 when you don’t mean to (£50,000 is a lot more than £5,000!) but it can have a big impact on your tax liability!

 

  1. Once happy, save the tax computations and tax return form, and submit to HMRC – Remember to save a copy of your tax computations and tax return form as a PDF so you can easily refer to it later without logging back in.

 

  1. Finally, Plan Ahead to pay HMRC! Your tax computations will tell you what you need to pay. The deadline to pay is 31st January (the same day as the Self-Assessment is due). If you have any second payment on account to make (again this will be shown on your tax computation), the deadline to pay is 31st July following submission of your Self-Assessment earlier in the year.

Details on how to pay HMRC can be found on the government website.

 

If in doubt, get help!

Our team of accounting professionals at Mushroombiz can help you get your tax return in order. Remember, the deadline is 31st January. Don't wait until it's too late or else you will be penalised for not completing your filings on time. We want to make sure that you are prepared come tax season, so don’t hesitate to contact our experts today.

GET STARTED ON YOUR SELF ASSESSMENT FOR FREE, AND GET 20% OFF YOUR TAX RETURN