The success or failure of a new startup or small business is largely down to the experience, commitment, and knowledge that the founding team possesses. While for larger corporations it is easy to rely on revenue streams while team members can be replaced, for a startup hiring the wrong team member can cause the business to collapse in a short space of time. Hiring your first financial team member is an important step as it is ultimately financials that will make your business grow. Below, we look at the key traits to look out for when hiring your first finance team member.

Analytical skills

Your new finance hire will be working with figures, projections, estimations and all other kinds of financial numbers. They need to be able to easily analyse where the financials are going, if unnecessary money is being spent and where improvements can be made.

This will require forward-thinking, intuition, great analytical skills and, of course, a great knowledge of working with money. From this, they can provide the team with important figures such as a business’ burn rate, the current cash position of the company and when this money will run out if that burn rate continues.

Good communication and board reports

Taking this analytical skill further, it is highly likely that much of the financial language will be confusing to the rest of the team. The new financial hire needs to be able to not only analyse the state of the finances of the company, but to also be able to effectively communicate this back to the other members of the team; whether that be the CEO, a manager or a regular employee.

Someone that is able to produce monthly board reports with up-to-date numbers can keep everyone aware of the current state of the business.

Technological ease

Your new hire will need to be able to work with technology with ease. Not only is financial information now primarily stored digitally, but it helps to keep the whole process streamlined. Such technological knowledge includes things such as whether the potential hire knows Structured Query Language (SQL); a quality that many firms now look for.

Knowledge of fundraising sources

Not only is it useful for your hire to have inside-out knowledge of the finance industry, but also if they have knowledge of fundraising or investment opportunities. There are many government grants and research and development tax credits available to businesses which can sometimes return millions of pounds’ worth of cash. Someone with this knowledge could be invaluable.

Employee stock ownership plan (ESOP) management

If you have ESOPs in your business, which is employees that have stocks within the company, then it can be useful if your finance hire has knowledge of this field; therefore, meaning they can help to manage this for you in-house rather than handing it to a law firm.

As a new startup you may have equity options being handed out, but as this is your first financal hire, it may be that the team is not that large, therefore having a candidate with ESOP knowledge is not essential. However, it does not hurt to think about these things for the future.

Honesty and independence

Money and cash flow is the most important factor in keeping your business alive, and so you need someone that you can trust and that is honest. Your cash will determine exactly what state your business is in, and it is highly likely that your financial person will be working independently much of the time.

With this, you need someone that is good at working independently, but will still report in on the exact figures. And, of course, they need to work effectively in the team as well.

Problem-solving

Your financial candidate will need to take their analytical skills one step further and ensure that they offer solutions to any problems that may arise. As the first finance hire in a team, the responsibility falls on them to solve these problems, and in a fast-moving startup this may need to be done quickly or risk causing further damage to the business.

Making your first financial hire can be a challenging decision, especially if you aren’t knowledgeable in this field yourself. However, it is an important decision, so be sure to take into account the factors listed above to continue building your successful team.

If you have equity in a business, it means that you have ownership of part of a business, depending on the size of your equity. So if you have 5% equity in a business, then you own 5% of that business. Equity can essentially be worked out by subtracting the liabilities of a business from the assets, and from there you can work out the portion that you own of the remaining amount. Below, we look at the ins and outs of equity.

Why is equity important?

Equity, also called equity financing, is the raising of capital or investment through the selling of shares or ownership within a business. The alternative is offering equity to members of your team who, rather than investing in your business, will be offering their services instead to help the business grow and increase revenues.

Equity gives entrepreneurs and small business owners a way to scale their business without parting with much-needed cash, especially in their early years.

What equity will mean for a business

For a bootstrapped business that is not seeking external investment, but is instead offering equity to their employees, co-founders or one of the early team:

For the business owners

They may be able to offer equity in return for a lower salary each year, which will help them retain much needed cash. They will most likely find that they get more effort and commitment from the employees who have equity as they have a personal stake in the business.

However, on the flip side, it may mean that the business owners are forced to part with a large chunk of cash further down the line when the employee trades their equity in. But, if this employee has been integral to the growing of the business, then this should be well deserved.

For the equity holders

The employees or workers with equity will have a direct stake in the business, giving them a real reason to go the extra mile each and every day.

A downside is that they may have to take less salary, or potentially even no salary, in return for equity, and there is no guarantee that the equity will turn into anything should the business fail. They would also need to fund themselves in the meantime should they be taking a lower salary, which could be hard if they are fully focused on the startup.

For businesses that are offering equity in return for investment:

For the business owners

This is a typical way for a business to raise investment should it need it, and they will trade some of their business away in order to receive funding to grow. Again, it means that they can hold onto much-needed cash, which can be vital in the early years of a business.

However, business owners do not always have as much control over how much of their business they have to give away, especially if they desperately need the money. Investors will typically take a larger percentage of a business in return for investment. Should the business grow to be of high value, then this will be a profitable venture for both the business owner and the investor, but if this is not the case, it can be costly for the company founder.

For the investor

This can be a great move for investors as a way to generate passive income, and hugely successful businesses like Uber, Air bnb, and Dropbox have come from investment platforms. There is no guarantee that they will get a return on their investment, but they only need one investment to be successful to provide them with their necessary returns.

The benefits of equity

As a business owner, there are many benefits for equity. You will not need to repay anything at any time, and there is a much lower risk of bankruptcy involved, but you will, of course, be giving away part of the ownership of your business.

While some believe the private equity market can be associated with greed, it can be an extremely profitable and lucrative move if the business continues to grow, and is a good route to go down should you need to save cash within your business.

You may have the greatest idea for a product or startup in the world, but ultimately, without money, it is going to be difficult to make your idea grow and reach new audiences. One of the best ways to fast track the growth of your business is to seek seed funding from an investor. Below we look at how to get seed funding as a startup.

What is seed funding?

Seed funding is an initial form of investment made into a company purely to get it to grow to a self-sustainable level, or until it is ready for a larger round of investment. Seed funding is typically the second stage of investment, after start-up funding, which usually involves small amounts of money from family and friends. Seed funding, on the other hand, is done through angel investors, and they will typically take equity in return for offering investment.

Although it would be nice to maintain full control of your startup, this is not always practical, and seed funding offers a great alternative for keeping your business alive and up with the competition.

Should I raise seed funding?

Despite the above point, not every startup will need seed funding. Before you take this route, carefully consider whether you need seed funding or not. Paul Graham, the founder of Y Combinator, one of the most successful investment platforms, says “don’t raise money unless you want it, and it wants you.”

What this means is that if you’re going to be successful in pitching for investment, you have to show the investors that you want it enough and that your business wants it to. Investment is best for businesses that are fast-growing or are planning to grow fast with the investment, so if you fall into neither category, then seed funding is not for you.

How much seed funding should I raise?

Generally, “as much as you can” is the most common answer that you will find to this question, but remember that bigger does not necessarily mean better. Extra money can, more often than not, mean extra pressure, such as more due diligence, more control being passed over to the investors, and more questions that need to be answered about where the money is going.

But, the more money that you receive, the more likely it is that you can get your startup to a profitable point at which you may not need investment again in the future. As with the last point of considering whether investment is right for your business, carefully consider how much seed funding you need as well.

When you pitch to investors to get seed funding, you want to show them exactly why you want the amount that you do, and show them exactly what impact this will have on your startup. You need to convince the investors that they should be parting with their money for your startup. For this, consider what your burn rate is and what your milestones and goals will be, as investors are likely to ask you these questions.

Sourcing seed funding for your startup

Once you have carefully considered both why you want investment and what you will do with it, you can carefully craft your pitch to deliver to investors. There are hundreds of investors, funding platforms and crowdfunding campaigns available for you to source the necessary seed funding for your startup.

You could use crowdfunding websites such as Kickstarter or accelerators such as Y Combinator, as mentioned earlier. Each of the different types of platforms offer its own unique benefits, targets and levels of investment, and you need to find the one that best reflects your startup interests, goals and funding required. Resources such as this are a great place to start to see the different platforms available to you.

Also, considering reading guides such as A Guide to Seed Fundraising for further detailed information on the process. Seed funding, while a big commitment, can help scale and grow your startup immensely to help it reach new heights. Carefully think about where you want your business to go over the next few years, and from there you can decide just how and why you want to seek seed funding.

If you fully believe that you both need and want seed funding, then this will come across in any pitch that you make to investors, securing you that much-needed investment.

If you are in the need of accounting software for your small to medium enterprise (SME) you have many choices. Long gone are the days when Quickbooks was your only option – today’s cloud based accounting programs are innovative, adaptive and designed to help you keep track of your books in ways that are well suited to your start up business.

The old giants of accounting software are being challenged and overthrown by a new wave of web based programs that will help you to keep track of your profits and losses, your VAT, your cash flow, invoices, employee wages and more.

If you are overwhelmed with all of the options on the market and wondering what you should consider when making your decision, read ahead.

Remember – large corporations often employ a ‘finance manager’ or lead accountant who is one of the most important people in the company. Your accounting software will play this role until the time when you too need a dedicated accountant – don’t treat this decision lightly. Take your time and do your research – What functions do you need your accounting software to be able to handle? What are the daily tasks that you need it to do? These are all things to consider.

What country was it designed for?

While Australian or American accounting software will certainly work for many aspects of your business needs, it will not be able to meet all of your specifically British needs. If you choose to go with a foreign product, ensure that it has a setting for UK businesses.

Does it include VAT options that will suit your business?

If you are already VAT registered or plan to become VAT registered in the future, you will need to assess some of the functions on any accounting software you are researching. Can it accommodate Flat-Rate VAT? Will it automatically produce a VAT return, and can this be submitted to HMRC from within the software program. If your business has any complicated VAT rules to follow, you may need software that implements Reverse Charge calculations automatically – be sure to check this.

Does it offer multiple currencies?

Many software programs offer multiple currencies, but some do not. If you regularly do business in Euros, dollars or other currencies, this could be an important consideration when you make your decision.

Will it automatically link to your personal annual tax return?

Some software options will take all of the input information about your salary, profits and dividend payments and will link this directly to your personal tax return. Programs, such as FreeAgent, even have the capacity to submit your annual return directly through the software, saving you heaps of time and energy.

Can it link to your bank accounts?

Can this software easily link its information to your bank account? While certain programs need you to physically upload your bank statements, others can set up an automatic feed that communicates to your bank account and credit cards. The automatic option is preferable to many small business owners, as this means that they are always up-to-date.

Do you like the interface?

Before you sign on for a contract with any accounting software, you should ask for a free trial (if it is not automatically offered). This is important when assessing if the interface will work for you, and if you find it easy to use. If you find the system intuitive to browse, you will have a better time finding features that you use on a daily basis.

What kind of Reports does it offer?

This is a key measure of usability when it comes to selecting the right software for your business. First, you must determine what it is that you require – do you need comprehensive reports on a daily or monthly basis? Some other common reports to consider include (but are not limited to):

• A monthly balance sheet that includes details about all of your company’s assets, liabilities and your capital balance over the past year
• Your monthly Profit & Loss reports
• Debtors and creditors over 30, 60 and 90 day periods
• Information about your open ledgers
• A forecast of your upcoming year

Does it include payroll capabilities?

The ability to keep your payroll information neat and tidy within your accounting software will be a real time saver, and could prevent costly mistakes. Some programs include this option as a default, and others offer it as an add on.

Do you like the invoices it generates?

When trialling out your new accounting software, it is a good idea to generate a test invoice, so that you can see the layout, design, features and the overall ease of creation. This is a document you will be sending to your valued clients, so it is imperative that you like the way it looks.

Do they offer high quality customer service?

In the event that you do need help with your accounting software package, it is important that they offer reliable and affective customer service. If you are often working late at night or on weekends, it pays to check their hours and find out if help will be on hand on holidays.

Choosing from options on the market

Now that you have thought about what features are important to you and your business, here are some well rated accounting software programs for SMEs that you should have a look at as you begin your search.

• Xero – Xero is the UK’s leading cloud based accounting software, and boasts fantastic reviews from its users.
• Wave – Touting itself as a free alternative to QuickBooks, Wave is a simple accounting product that will be attractive to many SMEs based on its no cost model.
• FreeAgent – Specifically for small start ups and freelancers, FreeAgent has a UK focus and a host of features that self employed individuals will find valuable.
• Kashflow – Easy to use and ultra simplified, Kashflow is a good option for you if this is your first attempt at doing your own books.

If you are planning to start a small business, you already know about the trials and tribulations involved when searching for seed money and investment funds to help you get off the ground. Much like a child, your start up requires a huge amount of cash, time and energy, almost to the point that everything else in your life becomes secondary.

Finding cash to keep the business going – not to mention your personal life – can be a real challenge, and every little bit of funding can help keep you afloat for one more week. Thankfully, many different grant schemes exist across the United Kingdom that can help your start-up transition into its next important phases.

Read ahead to learn about some valuable information that will help you find, plan, apply and hopefully win the grants necessary for your start-up’s success, both in the short-term and across the long haul.

What is a grant?

Think of a grant like a loan that you do not have to repay. Don’t worry if this sounds too good to be true – they aren’t really handed out like sweets! In order to qualify for a grant, you usually must satisfy a series of requirements, fill out extensive (and often complex) application forms (known as grant writing) and ultimately be chosen as the recipient.

Grants are usually made available for students, not for profit organisations and yes – for small start-up businesses. A government department, corporation, foundation or trust usually disburses the funds, and as mentioned above, they do not have to be repaid. In some cases, you must also fulfill requirements after the grant money has been awarded and produce proof that your proposal was carried out with help of the monies.

How to qualify for a UK start up grant

• Create a detailed business plan – In order to qualify for any grant, you must be able to prove that you have a detailed, professional business plan that shows just how you plan to make your start-up business a success worth funding.
• Innovate – Innovative businesses are far more likely to attract the attention of seed funders and grant givers – if your start-up can prove that you are truly doing something outside the box (within common sense, of course), you will have a better chance of being awarded the funding that you seek.
• Reach out to the administrators – It is always a good idea to reach out and make contact with the admin support of the grants in which you are most interested. Ask them a few questions pertinent to your application, and ensure that you clear up any grey areas. Doing this will help you to gain an understanding of exactly what the deciding forces are looking for in a successful application.
• If necessary, reach out to a professional – If you are struggling to fill out your grant application, it is a good idea to hire a professional grant writer. A professional will be able to ensure that your proposal is filled out correctly and up to standards, thus increasing your chances of success.
• You must not already have started the project – Grant funding is usually contingent on the project (or even the business itself) not already having commenced. If you are applying for a grant to fund a specific project, you need to be able to demonstrate that the project has not already started.

You will need to put up some of your own funds

Remember, if you are looking for a small business grant in the UK, it is very rare for an organisation to provide you with 100% of the funding that you will need to build a successful company. You will still need to put up some of the money yourself, so it is a good idea to get started with saving and amassing capital any way that you can.

Where to look for UK Start-Up Grants

Even the most learned experts can have trouble keeping track of the myriad grant and funding opportunities that come and go across the UK.

Your first point of research should always be the Gov.uk website – their ‘Finance and Support For Your Business’ page currently lists over 531 grants and sources of funding available across England, Wales, Scotland and Northern Ireland (this number is subject to vary).

Remember to read the fine print carefully – some of these funding awards are only available to you if you live in a certain region or satisfy other requirements based on age, gender, ability level and of course, the type of business in which you plan to engage.

Once you do this, another great source of information is your local business association. They will have had experience with similar businesses attempting to get started, and they might know of grants that are not widely publicised. In some cases, they may even offer grant opportunities themselves.

Some other great places to start your search include websites such as www.j4bgrants.co.uk, www.grantnet.com, www.grantfinder.co.uk or www.grantsonline.org.uk. These sites aggregate all of the available grants across the country and help you search easily for one you may qualify for.

How easy is it to get a start up grant?

Sadly, getting a grant for small business in the UK can actually be quite difficult – there is only a little bit of funding to go around, and the competition is fierce. Your best chance of being selected for this lucrative funding is to write an excellent grant application, do your research and be persistent. Good luck!

Everywhere you look, it seems like new start-up success stories are appearing on both online media sources and in more traditional news outlets like magazines, newspapers and television. It seems that the general public just can’t get enough of start-ups – the ‘small time idea made good’ narrative is a popular one, and with crowdfunding successes at an all time high, many people have a personal stake in a local start-up business.

A lot of the start-up success stories publicised around the world are businesses solidly rooted in technology and design – software firms, coding entrepreneurs and online crowdsourcing platforms (such as Uber and People Per Hour) that are changing the way we do business on a daily basis. But what about the non-tech start-ups out there?

There are a plethora of thriving, exciting new non-tech related start-ups who are making a name for themselves in myriad different industries. From edible treats to wearable innovations, successful start-up businesses are not limited to the technological fields. Here are just a few of our favourite non-tech start-ups who are changing the game in their chosen sector.

• Rent the Runway – When it comes to high fashion in the capital, you need to be able to keep up with the richest of the rich if you want to be considered a sartorial force to be reckoned with. As posh designer frocks and Louboutin shoes can be priced in the thousands – and even tens of thousands – there is often a financial impediment to wearing the latest looks. That is where Rent the Runway steps in – this start-up has gone from zero to over 4 million members in just four years time. Boasting a closet worth over $800 million USD, Rent the Runway raised $116 million in venture capital last year alone. Expect big things from this novel rental business.
• Boomf – You might not associate success with marshmallows, but that is exactly what James Middleton (yes, of those Middletons) has done with Boomf. He has leveraged his cute and quirky idea for photo printed marshmallows into a million+ a year company. His marshmallow empire is rapidly expanding to North America and China, and he expects massive growth over the next five years. Puffy, sweet, silly – and very lucrative indeed.
• Air BnB – Undoubtedly the Queen Bee of the non-tech start-up world, Air BnB has skyrocketed past anyone’s wildest expectations to become a leader in accommodation around the world. Founded in San Francisco in 2008, this crowd sourcing platform allows individuals to rent out their spare rooms, entire houses and even a castle or two to eager guests. Despite a few legal hiccups here and there, Air BnB seems poised to take an even larger piece of the hotel industry’s pie as time goes on and more people feel comfortable with renting from perfect – although vetted – strangers. Experts predict that Air BnB is set to grow ever bigger, and customers are thrilled to travel, save money and experience local life in a foreign city.
• Innocent Smoothies – You can’t visit the cold drinks section of a market or corner shop in the UK without noticing the colourful little selection of Innocent Smoothies and juices. From a fledgling company selling fruit concoctions at music festivals to one of the biggest British names in beverages, the team at Innocent are an example of the success that can happen as the result of one ‘Angel Investor.’ They now sell millions of bottles a year and have become the number one chilled juice brand in Germany, Austria and Denmark. With plans for expansion, Innocent has recently launched a line of coconut water and children’s juices.
• Hello Fresh – Do you fancy freshly made, healthy and innovative meal ingredients delivered to your door on a weekly basis? If you said yes, you are not alone – Hello Fresh has 250,000 subscribers across the US, the UK, the Netherlands, Austria, Australia, Germany, and Belgium. Hello Fresh delivers weekly meal kits that have proven to be a huge hit across the globe, and investors agree – Bloomberg reports that they have recently raised €75 million (£54 million) in funding from Scottish investment firm Baille Gifford, lifting their valuation to €2.6 billion (£1.8 billion). Not too bad for a small start-up launched only in 2012!
• Handy – Perfect for people who don’t really know their way around a toolbox and have no idea how to deep clean a toilet seat, Handy provides on-demand cleaning, household chores and furniture assembly. Clients can order freelance cleaners, handy people and skilled service providers to take care of the little chores they just don’t get to on a regular basis, or complete daunting one off tasks. Founded by Oisin Hanrahan in 2012, Handy is now worth over $500 million USD, and has recently rebranded and rolled out a new app.
• Birchbox – Like a child looking forward to a box of candy, women (and some men) all over the UK, Ireland, Spain, France and the US look forward to their Birchbox subscription arriving each and every month. Packed with deluxe samples of hair care, make up, skin products and other handpicked goodies, this company is gaining accolades with its subscribers all around the world. Launched in September 2010, they now ship thousands of boxes each month and are looking to expand even further.

If you are a non-tech small to medium sized enterprise, you are not alone. More and more businesses across every industry imaginable are utilising the start-up model. While some people might automatically imagine technological products and software innovation when they think of start-ups, the above examples prove that the start-up world is anything but limited to tech. Non-tech start-up businesses are lucrative, successful and paving the way for the future of entrepreneurship in the UK and around the world.