While many deductions are commonly known, like mortgage interest and charitable contributions, you may be wondering if life insurance is tax deductible too. But before you go writing off life insurance premiums this tax season, here’s what you need to know.

What is a tax deduction?

Tax deductions are amounts that you can subtract from your taxable income to help you pay less in taxes. Some standard tax deductions are contributions to health savings accounts (HSAs) and what you pay in property taxes. That means when tax season rolls around, you’ll add up your taxable income, then subtract any deductions that you qualify for before determining how much you’re going to pay or receive in a refund. Since there are different eligibility rules for each deduction, it may be wise to consult with a tax professional if you’re unsure which specific ones apply to you.

Is life insurance tax deductible?

For the average person taking out a personal life insurance policy, the premiums you pay are typically not tax deductible. That’s because they’re considered a personal expense. And since life insurance isn’t required by the government, there’s no mandate that you must be insured, which means no government tax breaks. But that doesn’t mean there aren’t unique situations where you can deduct life insurance premiums from your taxes, like:

When you own a business

If you own a business and pay life insurance premiums for your employees, those premium payments may be deducted as a business expense. For most businesses offering a group term life policy to employees, the premiums are typically deductible up to the first $50,000 in coverage per employee.

When the beneficiary is a charity

If you take out a life insurance policy and name a charitable organisation as the beneficiary, you may be able to write off some of the premiums as a tax deduction. But in addition to naming the charity as the beneficiary, you’ll also need to transfer policy ownership. And that means there’s no changing your mind after the fact. So, if you’re debating making a charity the beneficiary of your life insurance policy, you may want to discuss tax deductions with a financial professional first.

How to determine if your life insurance is tax deductible

Working with a qualified tax planner or professional is a good idea if you’re unsure if your life insurance premiums are tax deductible. And it’s important to work with an expert if you’re a business owner that’s not 100% sure how to go about deducting the premiums. Plus, it’s worth noting that while your premiums may not be tax deductible, the death benefit paid out to your beneficiaries is often tax-free. You’ll also receive the benefit of tax-deferred growth if your life insurance policy has a cash value component. So, you can think of it as paying your dues on the front end so your loved ones can receive a higher benefit and lower tax burden down the line.

The bottom line

For many people, life insurance is not a tax-deductible expense. But the benefits of maintaining a policy far outweigh the downside of not receiving a tax break. If you think you may be eligible to deduct life insurance premiums, seek the advice of an expert financial or tax professional to confirm.

Some of the most successful businesses have come about because the founder was trying to solve a problem that they had experienced, often just for their own benefit. There is nothing wrong with setting up a money-making project as a hobby, and no need for a hobby to necessarily turn into a full-fledged business. But it is worth understanding your own motivations and being clear with yourself about what you want to achieve.

What is the difference between a hobby and a business?

There are no hard and fast rules that distinguish between a hobby and a business. For me, it is a state of mind – what are you trying to achieve? Is this a project to fill time, or are you single-minded in your desire to set up a successful business? It’s an important point as businesses take time and devotion. Many businesses fail because their founders aren’t prepared to make the sacrifices necessary to make the business a success. 

What business structure should I use?

There are a large number of potential legal structures available for people setting up a profit-making enterprise. However, in most cases, only two are relevant: sole trader and limited company. 

A sole trader is when an individual begins to trade in their own name. For example, I decided to set up a coffee shop, and call it “Beans Coffee”: the business would be “Michael Buckworth trading as Beans Coffee”. Setting up as a sole trader is a quick and easy way to get up and running: all you have to do is notify HMRC that you are now self-employed. You can find out how to do that here. 

Limited companies are separate legal persons meaning that they exist separately from their owners. They can enter contracts, borrow money, and are liable to pay tax on their profits. You can register a company easily by filling in an online form and paying £12. One of the most important differences between a sole trader and a limited company is that a limited company has limited liability whereas a sole trader doesn’t. With a sole trader, if something goes wrong, you are personally liable for all the debts of the business, whereas (in most cases) if a limited company can’t pay its debts, it goes bust, but the assets of its owners and directors are protected. 

Which one to choose? As a rule of thumb, it is fine to operate a (low risk) hobby via a sole trader. However, if you are planning to grow and scale a business, I would suggest incorporating a company from the get-go. There is one footnote to this advice: once you incorporate a limited company you have to make an annual filing with Companies House and file accounts each year, so there is a cost associated with it. It isn’t a problem if your business is going to grow and scale, but it could be an unwelcome cost if you don’t intend to generate more than modest amounts of revenue. 

Are any profits I make on a hobby tax-free?

There are two certainties in life: death and taxes. However, there is a small allowance for people making modest amounts of money from hobbies and side hustles. If you have earned less than £1,000 from your hobby (and any other side hustles you may have in play) during a tax year, you don’t need to declare that to HMRC as income. However, any more than that must be declared, and you have an obligation to keep track of your earnings to make sure that you don’t exceed the limit. 

Do I need to worry about contracts and insurance for my hobby?

In my view, any business should have in place contracts with its customers as soon as it starts to trade. Contracts are hugely important as they limit your liability if something goes wrong and protect your revenue stream (as well as providing protection in a number of other important areas as described in detail in my book, Built on Rock, an entrepreneur’s legal guide to start-up success.) Most businesses will also want to have in place insurance to provide protection if something goes wrong. 

Whether you need insurance for your hobby depends on what you are doing, and the likelihood of you becoming liable if something goes wrong. Imagine you sell face creams online: you would want insurance in case a customer suffered an allergic reaction to your cream and sued you for personal injury. By contrast, if you are selling birthday cards online: you probably don’t need to bother with insurance as the risks are minimal and can be covered off in a simple customer contract. The key questions for you to consider are “what can go wrong?” and “what is my likely exposure if something does go wrong?”

What happens if I change my mind and want to flip my hobby into a business idea?

If your hobby really takes off and you realise that this is something that could make a viable business, congratulations! It probably makes sense to flip the business into a limited company sooner rather than later. Why? Firstly you can’t raise investment from third party investors as a sole trader – you need a limited company to do that so that you can issue them with shares. Secondly, you probably want the protection of limited liability if you are going to try to scale up your idea: the more customers you sell to, the greater the risk. Thirdly you want to make sure that the intellectual property rights in your business idea (the intangible stuff that you create as you develop your business such as your logo, the design of your product and the source code in any software you create) are created in and belong to your company, as this optimises the chances that you will later be able to qualify for a bunch of tax reliefs for start-ups. 

I have no business experience: can I really set up a business?

Over the years, as founder of Buckworths, I have spoken to many would-be entrepreneurs who worry that they don’t have any business experience, or the skills to be able to run a business. The good news is that it generally doesn’t matter. You can figure out the answers to most problems through research and  by speaking to people who have already figured it out. It doesn’t matter if you are a student, a stay-at-home mum, a retiree or a person working a 9 to 5 job. You have a uniquely personal experience that has led you to come up with your idea; you have a set of skills that can be harnessed to get your idea off the ground, and you have as good a chance as anyone else of making a success of it. Grab the bull by the horns, launch yourself onto its back and enjoy the ride. 

However, since obtaining a business venture loan can take a very long time, there is value in financing your business necessities effectively and timely with a personal loan for entrepreneurs with good credit scores. Keep reading to know more about determining your capital needs in business and why it is important for your further success.

How To Determine Your Capital Needs In Business?

To get the capital that you require, you must know your capital needs in your business. Generally speaking, your needs will be determined by the type of business you are starting, along with additional factors like seasonality, number of employees, monthly expenses, etc. When you have determined the type of business you are starting, along with these additional factors, there are two ways to determine your capital needs in business.

Using A Capital Budgeting Model

A capital budgeting model is an easy way to figure out your capital needs in business. However, it will be critical for you to have good cash flow forecasting skills since the main purpose of using a capital budgeting model is to determine the optimal timing for purchasing fixed assets. This method involves calculating various scenarios to find an optimal plan for future cash flows based on the factors that will affect them.

Using The Unit-Of-Production Method

The second method is the unit-of-production method. In this case, you will need to figure out the capital needs of your business at a future date, and then you can use that to determine the required amount of capital for that date. You can find the answers to these questions by determining:

• Your sales – What is your revenue? How many sales will you make? This will tell you how much profit is expected from operations and how much working capital is needed. It also lets you know what level of sales must be attained to break even (or if profit is expected).
• Your expenses – What are your total costs? This will also tell you the amount of working capital needed to operate your business. This amount will vary based on the factors you have determined earlier.

It is essential to understand that the stages in case 2 are based on future projections, which means that you must estimate what factors will impact current cash flows to project future cash flows. The idea is for you to find a method that fits your business’s needs. Be sure to check with a financial advisor or accountant if necessary.

Questions That Will Help You Determine Your Capital Needs In Business

Once you determine the level of sales and expenses for your business, you will determine the capital needs in business. Here are some questions that will help you determine your capital needs:

• Type Of Business – To start a new business, you need to consider the type of business. If it is an online retail store, you must consider how much it costs to hire and retain employees and whether or not there is seasonal demand (i.e., Christmas).
• Seasonality – Several factors can affect seasonality, including local economic conditions, holidays, weather, and price competition. For example, it is difficult to lose money in the holiday season, but in the summer months, when they are selling less expensive items, there can be a lot of competition, and margins will be tight.
• Number Of Employees – You must consider your number of employees and how much they will cost in payroll and benefits. There are different considerations when it comes to hiring employees for seasonal positions versus full-time positions. If you have seasonal positions, you must be ready for lower employee turnover rates. In contrast, if you hire full-time employees, expect higher costs.
• Monthly Expenses – In addition to payroll, you will have other expenses that can vary from month to month, such as rent, utilities, and insurance premiums. Having a fixed or low rent is an advantage over having high rent because you must pay the rent, even if sales are down.
• Vendor Credit Availability – If you have unique items that are difficult to find elsewhere, you may be able to negotiate for better payment terms with vendors. Having timely payment terms with vendors is critical to maintaining vendor credit availability.

Common Sources Of Short-Term Business Capital Financing

There are many short-term business capital financing sources, including trade creditors, payday loans, factoring, and line of credit.

Trade Creditors

Credit from trade creditors is often seen as a good source of short-term business capital financing because it is easiest. Trade creditors are basically businesses that you have done business with in the past. These creditors will extend credit on a verbal agreement on the assumption that you have a recurring business. However, there are cases where payment is slow or not made at all because trade creditors choose to wait until the end of their fiscal period. There are also instances where they sell their accounts receivables (if allowed) to collect payments before you pay them.

Payday Loans

Payday loans are short-term advances of money that are made available within a period of two to ten days. Payday loans are regulated by the state in which they are issued, but they do not require checking or bank approval. Usually, loans are deposited on prepaid debit cards if needed. 

You have to leave collateral in the form of your checking account, car title, or some other item that you can quickly liquidate to obtain access to your money until your payment is received. If you have bad credit, the interest rates are typically higher than for other types of short-term instalment loans.

Factoring

Factoring  is another source of short-term business capital financing. You can request your business to be factored in if you have sales below the minimum credit line. Factoring is also called invoice discounting or invoice finance.

A merchant account provider will take your invoices and apply a discount to purchase their services until your customer pays them in full. This kind of financing is typically short-term because the interest rates are generally higher than for traditional bank loans or personal loans.

Line Of Credit

A line of credit is typically used by businesses that need to make large purchases in a short period, such as machinery, plants, and equipment, computer equipment, etc. Your bank will set up an account for you with a line of credit that is limited to a certain amount. This will depend on how your business has been doing, but most banks will expect to see monthly sales of several thousand dollars for you before they extend a line of credit.

The Bottom Line

Business capital is very important. It is the money you will use to buy items or supplies, pay employees and make ordinary expenses. For refinancing business capital, you should understand the amount of capital required for an individual business. This will be determined by your revenue, expenses, assets, and liabilities. You must then determine the profit that you expect to make in your business. You can then consider these factors before estimating whether or not to seek financing from a bank or other short-term business capital financing sources to finance your business needs.

With the positive economic forecast and a tax favourable environment, is now a good time to consider selling a business?

Hazlewoods Corporate Finance team has seen a surge in buying and selling activity across a range of sectors. Mid-market private equity houses are seeking quality assets to strengthen their portfolios – and have cash which they must deploy. Likewise, corporate acquirers are seeking to enhance their market share and consolidate their position post-pandemic and are seeking acquisitions that enhance their market position.

Meanwhile, many business owners have been assessing their personal and business aspirations over the past year or so, with many deciding that new pastures lie ahead. Selling to the existing management team via a management buyout (MBO) or employee ownership trust (EOT), or to a trade buyer or private equity, enables them to secure their business and the future of their employees while creating flexibility for them to explore other interests.

With the economic forecast improving and well-structured business disposals attracting only 10% tax in some cases (or even 0% tax on a sale to an EOT), now is a great time to sell, particularly since this could all change in the Chancellor’s next Budget; there is a considerable risk that the tax environment may become less appealing in the not too distant future, so it might be best to strike while the iron is hot.

How can the Hazlewoods Corporate Finance team help with exit planning?

Hazlewoods has one of the most active Corporate Finance teams in the UK (we were ranked 6^th overall in Experian’s most recent M&A report). Last year, despite the impact of COVID-19, we completed 133 transactions valued at more than £763 million. In the previous 12 months, the figure was 205 deals worth more than £1 billion.

We guide business owners through the exit process every day. We offer a partner-led service from inception and initial scoping right through to completion day and beyond, offering expert advice every step of the way.

We have extensive experience in strategic planning to maximise value on exit and ensure the sales process runs seamlessly.

Here is a brief summary of our proven approach:

• Preparation of an Information Memorandum (a sales brochure that will highlight the strengths of your business to a potential buyer)
• Creation of a Blind profile (a one-page teaser document that will be sent to potential buyers)
• Assistance with the preparation of an integrated forecast model
• Research and identification of potential acquirers
• Advice on the financial and legal structure of the proposed transaction (including any steps required to minimise the tax liability on disposal)
• Guidance on tactics and negotiation of the terms of the sale
• Review of the legal documentation, including the Sale and Purchase Agreement
• Comprehensive deal management – co-ordination of the process through to completion

What would you say are the most important things to consider when planning an exit?

Without a doubt, taking steps to maximise the value of your business is imperative – anyone who is selling their company wants to get the best possible price for what has often been their life’s work.

The following steps will enable you to create a business that is investment ready:

Get your books in order

Accurate accounting information and financial statements are not only important for the effective management of your business, if you want to sell, they provide the best measure of current and future performance.

Create a business plan

Having a strategic business plan will provide potential buyers with the comfort that you know where your business is going and how it will get there. It will increase your credibility in the eyes of investors.

Update systems and controls

Put in place policies and procedures to ensure that your business operates efficiently and complies with laws and regulations – this will reassure a buyer that the company can function effectively post-sale.

Strengthen customer contracts

Your order book will demonstrate your company’s viability. Make sure that client contracts are up-to-date and enforceable as this will show that (at least for the length of the contract) customers will remain with the business when it is sold. Where possible, strengthen existing client contracts and confirm new recurring revenue streams.

Diversify

Reliance on a handful of customers can be problematic. If important customers switched suppliers, it would pose a risk to revenue and cash flow. Aim to reduce customer concentration and diversify your customer base so that you are not reliant on a few specific customers. Additionally, ensure that you are not dependent on a single supplier – if they cannot provide materials, you need to be able to get them from somewhere else.

Improve profitability

Consider ways that you can cut costs to boost profitability, focusing on the bottom line, not the top. If your company is valued on the basis of a multiple of earnings, increased profit will lead to a higher valuation.

Build a strong and motivated management team

Your business is only as good as the people who run it. Make your staff a key asset (a buyer is likely to want to retain them post-sale), make yourself dispensable (rather than indispensable!) and show that you are not vital to the success of the business.

Protect your intellectual property

Patents, copyrights, trademarks and brand names can enable a company to sell its products and services for more money and deter competitors from entering the market. A potential buyer may be prepared to pay a premium for a company with protected IP.

It can take up to five years to become investment ready, but by starting this process as early as you can, the end result will be a profitable, cash-generating business with a robust management team, a positive brand image and strong customer and supplier relationships. This will make your Company an attractive proposition for potential buyers.

What trends do you anticipate for the M&A space for the remaining part of the year?

We forecast a continuing strong demand across numerous sectors, particularly for tech-enabled businesses and those with a strong brand and intellectual property. We are also anticipating an increasing number of MBOs as owner-managers want to retire and leave their business in safe hands.

We have also seen an increasing number of clients wanting to exit via an EOT. In a nutshell, the shares in the business are sold to a special type of trust which is owned by all of the employees – the idea being based around the John Lewis Partnership model – the staff are able to share in the company’s profits with a tax-free bonus of up to £3,600 each annually. Employees do not need to put any money into the business, and it is attractive to shareholders who want to exit because they can sell their shares to the EOT – and take out the money owed to them - tax-free. In comparison, a sale to a third party would incur capital gains tax of at least 10%.

Overall, 2021 is looking bright with a raft of transactions in the pipeline for the Hazlewoods Corporate Finance team.

If you would like more information or a discussion on selling your business, please get in touch with Rich Grover at rich.grover@hazlewoods.co.uk or 01242 680000.

What? Never pay yourself a T4 salary?  Whatever do you mean?

If you pay yourself a T4 salary of $60,000 or more annually, then you are fully paying your employee portion into the Canada Pension Plan (CPP) and your business is paying the employer portion into the CPP.  In other words, you are paying double into the CPP.

This means that jointly you are contributing approximately $6K-$7K per year, and if you do this over a 30-year timeframe, you would have paid $180,000-$210,000 into CPP without any return on your investment.

That’s right. You will NEVER get 100% back of what you put into CPP.

For example, if I was able to offer you two options, which one would you take?

Option #1: You get $264,000 or $292,000 of CPP income, all of which is taxable and none of which will go to your estate.

Option #2: You get $418,000 of tax-preferred or even tax-free money, and it will result in an estate for your beneficiaries.

Let’s drill down on that.

The current annual CPP for someone age 65 is $13,900 per year.  No, not all all Canadians are at this level, but we will use it as our basis.

The average life expectancy for a Canadian male is age 84, and for a female it’s age 86.

In Option #1, if you start accepting CPP payments at age 65, you would get approximately $264,000 by the time you turn age 84 ($13,900 x 19 years), or $292,000 by age 86 ($13,900 x 21 years).  But 100% of that income is taxable!

If you pass away early, you will receive less money, although it will rollover to your spouse on a tax-free basis.  But when your spouse passes away – unless you have children dependent upon you – your CPP is gone forever.

But what about Option #2? What if you didn’t have to contribute to CPP?

Then you could take your $6,000 per year and invest it into a conservative portfolio with an average annual return of 5%. After 30 years, it would be worth $418,000.

If the $418,000 is in a non-registered portfolio, then it is only 50% taxable on the capital gain. And if the $418,000 is in a TFSA, then it is 100% tax-free money.  Wow.

Make sense?  Instead of paying yourself a T4 salary, you should pay yourself a T5 dividend income. By doing so, you are exempt from contributing to the CPP.

Now you are in control:

• you can withdraw money on your terms
• if you pass away early, the money will rollover to your spouse
• when your spouse dies, there is an estate for your beneficiaries

So back to my question. Which option would you prefer?

Option #1: You get $264,000 or $292,000 of CPP income, all of which is taxable and none of which will go to your estate.

Option #2: You get $418,000 of tax-preferred or even tax-free money, and it will result in an estate for your beneficiaries.

Option #2, of course! As an incorporated business owner, contributing into the CPP is a negative return on your money. So NEVER pay yourself a T4 salary!

Business owners: This is just one of the secrets from my MasterClass,The 6 Secrets: What Every Business Owner Must ALWAYS and NEVER Do With Their Corporate Cash Flow.  Want to see a live illustration of this Secret and the 5 others? And get some great bonuses? Just watch here: http://bit.ly/2JiIpnK 

John Moakler, BMath, CFP, CLU
President and Senior Executive Financial Planner
Moakler Wealth Management, Inc.
info@moaklerwealthmanagement.com

www.JohnMoakler.com

What does a field visit business do when the country is locked down?

Firstly, we did the right thing and suspended all field activity. We then started planning and did our best to assess what the future may look like. We needed to think of new ways to gather or provide information if we could not visit people’s homes in the short to medium term and thought any other initiatives we could do. We needed to be agile and responsive – a cliché but ‘adapt and survive’ has been our approach. Our field service is bespoke to our clients’ specific needs and we estimate we complete over 400 different types of field visits for our clients. The field visit type and process adopted varies from client to client depending on a variety of factors, across the UK.

Our field service is bespoke to our clients' specific needs - we estimate we complete over 400 different types of field visits for our clients, the field visit type and process adopted varies from client to client depending on a variety of factors, across the UK.

Typically, the service we provide is one of customer engagement. This is carried out with the customer at their home, where we gather information about their personal or financial situation. For mortgage lenders, this could include information on their security/asset, occupancy information and general condition. We began to look at what other sectors we could support and in what ways we may be able to support them.

What new ideas have you introduced or are planning to introduce?

Initially, we looked at how we could capture the relevant information when we are unable to visit a customer at home. There were obviously many other options, however, we needed to ensure any alternative methods fitted within our Regulatory, Contractual and Operational parameters.

We have used our sophisticated, bespoke secure online system called AEGIS, for some years now. This is where all client and field agent reporting are completed. It is extremely flexible, and we tailor all reporting formats to that of our clients’ needs.

This was followed by our Aegis Mobile App which provides Field Agents with the tools to access up to date and complete instructions securely in the field on a real-time basis.

The Mobile App has been designed with security at its forefront so we can ensure that we capture sensitive information in a secure method and make sure it stays secure throughout its life cycle with us.

As we were already developing a new version of this app, we quickly established that we could use this (or a hybrid version of it) to offer the customer a secure link in our initial contact attempts, providing them with the ability to contact and update us on their situation remotely.

This service had actually been on my agenda for a while and gives the customer the ability to contact us (digitally) ahead of a field agent visit, in order to improve the interaction between the customer and the agent when a face-to-face visit takes place.

The mechanics are straight forward via our secure operating platform, however, COVID 19 has led to a review of our priorities in terms of our system development.

We are aware that customers we may visit in the future could be experiencing financial difficulty for the first time. We are also aware that they may be used to dealing with digital contact options on their mobile phone or tablet.

As a result, we felt we could further improve our success rate by providing a similar platform for the customer to engage with us. So, in the background, we have been developing a ‘self-serve option’ and ‘assisted self-serve’ to complement our field offering or act as a substitute if circumstances demanded.

As lockdown has eased, we have also changed our ‘reconnect’ and ‘occupancy check’ field processes to ensure we allow the customer to communicate with us or their lender (particularly if self-isolating or shielding).

We do not want to enter their home and as such, a reconnect process that can be paused and restarted (customer promises to contact their lender – we stop contact attempts, but the customer doesn’t make contact as promised – we restart) we are finding, now that we are back in the field, is proving both successful and popular with clients.

As a business, we have had a reputation for being innovative and COVID-19 has put this to the test. Whilst having various contact options in place, as previously mentioned, these are of little interest to certain of the sectors we support. Some of our regulated lender clients are understandably holding back on the field as contact attempts whilst ‘repayment holidays’ are in place, which could be damaging for reputational reasons. You then need to be flexible and lucky enough to explore other sectors for opportunities.

We have had success in working with an adapted process for our insurance clients where claim verification is carried out remotely, using the customer as the field agent.

More excitingly new sectors of Government and Healthcare have been introduced to us, where having UK-wide ‘feet on the street’ is proving to be very exciting whilst we wait for our traditional world to return to some form of normality.

I think this whole COVID-19 situation has been hugely stressful for people and its impact will be felt for years.

From where you sit, what has your planning led you to conclude about the road ahead for the financial services industry - in particular UK lenders?

The impact of COVID-19 as we all know has changed all our lives and its impact on the economy is unprecedented. The UK lenders will have significant challenges ahead with the furloughing scheme coming to an end, unemployment rising and repayment holidays coming to an end. Localised and or regional lockdowns lead us to the conclusion that as a field business specialising in arrears home visits, regrettably we are going to be busy in 2021.

When do you think you will return to BAU if there is such a thing in the future?

No one has a crystal ball as we discovered with the COVID-19 situation. Our future planning has considered many possibilities including, for example, the possibility of a second lockdown. We are planning for our traditional markets to be back to some form of normality in March/April 2021.

It sounds as you are going to be busy. How will you cope?

As mentioned previously, technology will play its part and the introduction of APIs (Application Programme Interfaces) between key clients will speed the flow of information and its accuracy.

For our traditional field activity, we have capacity models and we always maintain safe headroom (50-100% capacity). We have, however, been recruiting heavily during lockdown and tapping into other pools of agents for our non-regulated activity and we will, I am pleased to say, put a further 200 agents into the field in September to support our scheduled work for the rest of 2020.

We have not been complacent. We have used this period to wisely invest in our IT and Operating Platforms with additional financial support from our owners (who I must say have been excellent and recognise the importance of putting Claven into a good place in 2021 will be hugely beneficial for their business).

With furloughed workers, working from home, schools and leisure facilities closed, the COVID-19 pandemic has socially and culturally had a profound impact on everything. Will there be more ‘vulnerable’ customers and policyholders going forward?

Vulnerable customer awareness, training, reporting and signposting options have been built into our business for many years. I think this whole COVID-19 situation has been hugely stressful for people and its impact will be felt for years. So yes, unfortunately, we will see more potentially ‘vulnerable customers’.

Historically, of the people we interview, 18-20% on average per month are considered to be potentially vulnerable. As such, we are working hard to refresh our processes and training. We are introducing Safeguarding training into our business and this is being developed as we speak. It is not just the mental and physical impact of COVID-19 on our customers. The economic casualties of this could include many people who possibly could be exploited too.

Andy, many thanks for your answers and insights. To finish, are there any ‘war stories’ you would like to share?

Too many and I am seriously thinking about writing a memoir, but my wife likes to say that I’m boring, so it’s best if I keep these to myself!!

Not at all and you should do it – we’d love to read it!

Content Guru, a specialist in cloud-based contact centre as a service (CCaaS) solutions, is at the forefront of a revolution in customer contact operations, helping organisations implement new systems for communicating with customers during the pandemic. Drawing on his company’s experience, Global Chief Executive Sean Taylor explains how a supportive partnership with an engaged investor can help a company build a solid foundation for growth, enabling it to scale successfully in international markets and turn growth challenges into opportunities.

COVID-19 has forced organisations to radically change how they function, underlining the importance of robust and scalable systems that enable businesses to adapt quickly.

As a global specialist in cloud-based contact centre as a service (CCaaS) solutions, we are operating in the eye of the current storm, helping organisations rapidly reconfigure customer contact operations. Demand for CCaaS solutions has risen sharply as traditional contact centres have struggled to cope with a surge in contact via both voice and digital channels.

Do your own due diligence on a potential investment partner - ask about their failures as well as successes and ask them to explain how they will add value and help you scale. Speak to their portfolio companies to find out what help they provided in challenging situations.

We have had to respond faster than ever - especially for clients running essential services such as NHS 111, the medical advice helpline which has been besieged by Covid-19 related calls, and the Department of Work and Pensions (DWP) which has seen a surge in benefits enquiries and, at one point, had 10,000 callers in their queue.

The pandemic highlighted a widespread need for scalable, flexible and secure solutions to enable vital customer-facing functions not just to remain operational but to handle the exponential rise in calls, while also adhering to social distancing requirements for employees.

Our ability to scale up quickly to meet higher than anticipated demand stems in part from having a supportive investor - growth equity firm Scottish Equity Partners (SEP) - on board. SEP helped us lay solid foundations such as scalable systems to perform critical functions like financial reporting and management information, which are vitally important as a business grows internationally.

Having these in place helped us accelerate our response to customer needs in the face of the crisis. For example, we reduced the lead time to migrate clients from a centralised contact centre with myriad legacy IT systems to a cloud-hosted CCaaS solution to just four hours - without compromising service or security. That compares to an average lead time of between four and six weeks pre-pandemic.

Managing rapid growth

The global CCaaS market was growing strongly before COVID-19 struck: in 2019 Gartner forecast that CCaaS would be the preferred adoption strategy for 50% of contact centres by 2022. This now looks a very conservative estimate.

Managing a sharp rise in business may seem an enviable challenge, however, not every CCaaS business is equally well-placed to capitalise on growth opportunities.

Numerous pitfalls can trip up a company expanding globally, at what can seem like breakneck speed. Growth constraints may differ, from cash flow (a particularly acute issue currently) to people or skills issues, inadequate financial systems, lack of knowledge of local markets, or supply chain issues.

Cash is critical - especially as the economic crisis has resulted in extended payment terms and reduced liquidity. Some businesses are squeezing suppliers to alleviate cash flow problems - however, that can cause relationship problems for the future and should be managed carefully.

To scale successfully you need to be a well-capitalised company with a presence in key global markets, underpinned by robust processes and systems, and led by an experienced management team. A key determinant for successful and rapid scaling up is not just the financial support a company receives from its investor but also their ongoing strategic input.

Scaling partnership 

Ambitious companies need to plan for growth and weigh financing options carefully before entering what is likely to be a long-term relationship with an investor or lender.

Although we have been cash-generative since we founded the company, we decided to seek external funding to enable us to scale faster (few businesses complain of being over-capitalised). And in seeking investment it is advisable to look not just for growth equity but a partner that would add value in a strategic way and would be supportive in difficult, as well as good times. It’s important to find an investor that operates locally but is connected globally.

It’s time to focus on moving from surviving to thriving.

Do your own due diligence on a potential investment partner - ask about their failures as well as successes and ask them to explain how they will add value and help you scale. Speak to their portfolio companies to find out what help they provided in challenging situations.

Adding value

SEP has helped us particularly around scaling operations and reporting systems to ensure we are monitoring growth accurately. We are growing fast and, throughout the process of upgrading to a cloud-based financial reporting system that has improved efficiency within finance processes and given us faster access to detailed management information, our investor has been on hand to advise us. This has been critical as we continue to scale every team within the business and invest more in international entities.

When you are scaling you need a strong leadership team and board. That is another area that a well-connected investor can assist: in recruitment and introductions to executives and non-executives who are a good fit for the growth journey, both now and in coming years. Business founders should acknowledge that a leadership team needs to evolve as the company grows, adding new skill sets or experience.

Challenges and opportunities 

I like the Winston Churchill quote: “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty”. The pandemic has created a difficult situation for many businesses, but we have had to adapt and cope with it. It’s time to focus on moving from surviving to thriving.

Being well-capitalised is essential, but scaling requires more than money. Bringing the right strategic investment partner on board can help ensure challenges become opportunities and keep you on a sustainable growth path that will build long-term value.

Ultimately, investing in yourself is what is going to lead to success. Here are some easy ways to invest in yourself so that you can run a successful business.

Take Online Courses

Learning is a lifelong process and even if you have been to college, there is still plenty you can learn. You are going to be constantly learning when you are starting a business. In some ways, you will be entering uncharted waters. You can prepare yourself for this task by taking online courses. Investing in your own education will help you be a better business owner. There are lots of options online and they are accredited so that you can obtain a certificate. With the right skills, you can learn ways to improve your business for the long term.

Enjoy a Holiday

A lot of business owners, especially in the early days of the brand, will not take a holiday. They focus all of their time in building their company. However, everybody needs to take time off work from and this includes the owners. This means that you need a holiday to avoid overworking yourself. If you continue to work long hours and feel stressed, this can lead to burnout. Taking a holiday allows you time away from a busy environment so that you can relax and recharge. When you return to work you can feel reenergized and refreshed, ready to take on the next challenge.

Work on Your Relationships

Personal relationships can often be neglected when you are trying to build a business. But spending time with your loved ones is a good way to relieve stress. You can also use this time to network and build good working relationships too. This will allow you to find the right partners and those who are going to benefit your business. Relationships with clients are also important and time should be spent interacting with them. This can make you feel good too.

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Look After Your Health

When you are spending a lot of hours in the office, it is easy to neglect your health. You may grab takeout food when you get home or skip meals without noticing. But this will take a toll of your health after a while. You may start to feel tired and lack energy. Not eating the right foods can affect your mental health too. Therefore, you have to invest in your overall health so that you can feel good and do the best for your company.

Start by enjoying a nutritious diet, making healthier choices when it comes to meals and snacks during the day. In addition, cut down your coffee intake and stay hydrated. You will be surprised how good you feel. Exercise is also important in this equation and a simple walk everyday can release endorphins to improve your mood.

Do not forget to visit the doctor and enjoy regular health checks. Even if you are investing all of your money into your business, you can use vision care loans online to help you look after yourself.

However, it can be difficult to know the aspects that are best to invest in. Here are five things your business should put their profits into in order to be successful.

Marketing

One of the most important elements of your business is going to be marketing. This is how you sell your products and services. Do not wait until you have built up a good customer database. From the beginning, you have to be investing in marketing so that you can grow. In particular, internet marketing is vital in the digital age and will attract new people to your business. If you do not know a lot about this, it is imperative that you outsource or hire employees that do. Having a marketing team will be highly benefit for your success.

Training and Education

If you want to continue to grow as a business, you need to invest in your workforce. Your staff are going to be responsible for the daily running’s and tasks at your company. It is essential they know how to be efficient and productive. Therefore, regular training is going to be important so that new skills can be learned and updated, depending on the field you are working in. There should also be a general opportunity for education so that your employees can progress.

Outsourcing

As your business builds momentum, there are going to be simple yet time-consuming tasks that need to be done. This could be anything from accounting to sorting the payroll. A good way to invest in your company, but save money at the same time, is to outsource some of this work. This can be a good way to find experts with the relevant skills and experience and only pay them for the work completed. Take your time and find professionals that are going to help your business grow and do not rush into decisions. Always seek testimonials before hiring third parties.

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Yourself

While many businesses owners remember to invest in their premises and their employees, they often forget to invest in themselves. There are still a lot of skills you can learn, whether this is taking online courses or attending conferences. After all, you are in charge of everything when it comes to your business. You want to stay up-to-date with the latest discoveries and technology so that you can stay ahead of the competition.

Equipment

If your business is doing well, you may see no need to change the status quo. However, it is essential that you continue to invest in your technology and equipment. This is going to allow you to keep up with innovations and trends in your industry. While you do not have to change your setup completely, every year you should be looking for ways to boost your efficiency. If you are worried about money, you can always look into equipment financing online. This can give you access to credit options.

The world of business has changed dramatically over the past couple of decades. Businesses now have access to a huge range of tools and products that are designed to improve efficiency, ensure the smooth running of the business, and make life easier. This is all thanks to the variety of inventors who have come up with great invention ideas for businesses.

If you have come up with a business invention idea, you just never know how big an impact it might have on businesses in years to come. Many people come up with some great ideas designed for businesses, but all too many decide not to pursue their ideas. This is often because they have no idea what they need to do once their come up with the idea.

Of course, this is bad news for the person that comes up with the idea, as it means they do not get to pursue their invention dream. However, it is also bad news for businesses, as they may end up missing out on an invention that could have proven invaluable.

The good news is that if you do have a business invention idea, you don’t have to give up on it because there is help at hand. Business professionals have the expertise and experience to help make your dream into a reality and to help you achieve success with your business invention idea.

What Sort of Help You Can Get

When it comes to the type of help you can get from these professionals, the assistance can be varied and invaluable. Some of they ways in which they can help you with your business invention idea include:

Ensuring You Have Protection in Place

If you have a new business invention idea, it is vital that you protect it so that someone doesn’t come along and claim it as theirs. You also need to protect against someone else coming up with exactly the same idea and achieving success with it. In order to do this, you need to ensure you have patent protection in place. This is a type of legal protection that provides security and peace of mind.

If you have a new business invention idea, it is vital that you protect it so that someone doesn’t come along and claim it as theirs.

While you may not know what steps you need to take to get legal protection in place, you can speak to business experts who will know. They can use their expertise and experience to ensure you have proper protection in place, and they will assist you with this so you can get it sorted out as quickly as possible.

Making Sure You Have the Right Prototype

Having a prototype of your creation is important for many reasons, but most people who are new to inventing don’t know where to start. There are various options you can consider when it comes to finding a suitable prototype for your needs, and the experts can help you to choose the one that is best suited to your needs.

With the right prototype, you can show other people what your invention does, how it works, and how it will benefit businesses. This can help you to gain the support of the business community, get interest from potential investors, and get the interest of the media to help you with publicity and spread the word.

Providing You With Access to Resources and Tools

As a new inventor, it is always helpful to ensure you access relevant tools and resources. This can help you to learn more about the world of inventing, and it can benefit you both now and in the future. However, many new inventors find it difficult to determine which tools and resources to turn to and how beneficial they are. If you are not careful, you could end up being exposed to information that is inaccurate or out of date, which can then have an impact on the steps you take with your invention.

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When you turn to professionals, you can gain access to valuable tools and resources that provide you with information and assistance. The ability to access these tools and resources with speed and ease means you will also save yourself a lot of time and stress. So, you can benefit from more time to focus on your invention.

Offering a High Level of Support and Guidance

As mentioned earlier, one of the reasons many people give up on their business invention idea is because they have no idea where to go for support and guidance. It can be a scary experience entering the world of inventions for the first time. If you have nobody experienced to turn to, it is often tempting to just forget all about it and get on with your normal life.

With around the clock access to support and guidance from experienced professionals, you can look forward to pursuing your business invention dream. You will always have help and advice at hand, so you never have to feel stuck or feel alone. This can make a huge difference to how much you enjoy your invention journey and how likely to are to achieve success.

Making Your Invention Journey More Pleasurable

Getting help from the experts can help to boost your chances of success when it comes to your business invention idea. However, it can also help to make the whole journey far more pleasurable and far less stressful. This is why it is well worth finding out more about how these professionals can help you.

When you are running a business, you will be doing many different things at once which can make you feel a bit distracted and draw your attention away from important things. For instance, you might start to put things off and before you know it, you have a lot to catch up on.

It can be especially easy to neglect your finances, and this can lead to further issues. To help you with this, we have put together some tips on how you can get on top of your finances.

Set Some Time Aside to Go Over Your Finances

One of the easiest ways that you can keep on top of your finances is by making sure that you set aside some time out of your day to go over them. It is important that you make the time to go over your business finances because this way you will know what payments need to be made and when. When you know what you need to pay, you will be able to look at your budget and make sure you have the funds to keep stable.

Stick to Payment Deadlines

The next way that you can get on top of your finances is by making sure that you stick to payment deadlines that need to be met. It is important that you do this in your business because if you miss dates you will have to pay more back in a lump sum, and be affected by even larger interest rates. If you can’t stick to payments when they are due, it can cause a lot of other problems as it can get in the way of business agreements and can lead to problematic debt.

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Consider an Investor

If you just can’t get in enough money to keep your finances stable, you still have other options to try. One of the other options that you can consider is getting in touch with an investor. Not only can an investor give you the funds that you need, but they can also give you advice and point you in the right direction when it comes to your business.

There are many different investors that you can consider getting in touch with such as Tej Kohli, Jeff Pulver or even your bank. Make sure you have a look so you can find the best option for your business.

Make Sure You Keep This Article in Mind

There are many different ways for you to keep up with your finances and in this article, we discussed some of the different options that you can consider. As long as you are able to stay on top of your finances, you should be able to get your business operating at its full potential.

What are the current trends in Kazakhstan’s investment and business climate?

Kazakhstan has always aspired to enhance its investment attractiveness by implementing a wide range of systemic reforms, including continuous work on improving its legislative framework. This has been done as part of the overall 2050 development strategy adopted back in 2012. Being viewed by many as predominantly a natural resources-driven market, Kazakhstan has adhered to the notion of significantly diversifying its economy. In this regard, the country’s leadership has emphasised the need to keep up with the current global trends of transforming the idea of investment attractiveness and the criteria by which it is evaluated. In other words, in a situation where investors are increasingly deciding in favour of technologies and brands developed in a country as opposed to only focusing on its natural wealth, Kazakhstan will have to envisage a similar model. To this end, the government has repeatedly indicated that the country’s longer-term strategy should be less dependent on abundant natural resources and more focused on offering investors high-quality human capital, technological infrastructure and conditions for the development of science, digital and innovations.

The course was set toward accelerated industrial and innovation-driven development and related programs (GPFIIR 2010-14, then GPIIR 2015-19 as part of the above mentioned 2050 Strategy and the Vision of Kazakhstan’s Inclusion in the Top 30 Most Developed Countries).

What is the government doing to boost and encourage investment in the country?

The country has in principle adopted a forward-thinking policy – both externally (i.e. in view of its efforts to better position itself in attracting foreign investments) and on the domestic market (with some incentives to encourage reinvestment by existing investors).

Kazakhstan's Ministry of Foreign Affairs, embassies and Kazakh Invest are making headway on the external front. There have been roadshows, with President and top government members participating, to different countries, one of the most recent ones being to Germany. The idea behind these roadshows is to further promote Kazakhstan as an investment destination. Some of the other initiatives worth mentioning include establishing the Astana International Financial Centre, joining the Belt and Road project and a few more. One of the practical measures aimed at easing administration for foreign businesses in the country was the introduction of a one-stop-shop mechanism for resolving all investors’ issues.

Being viewed by many as predominantly a natural resources-driven market, Kazakhstan has adhered to the notion of significantly diversifying its economy.

Furthermore, policy dialogue has been held through various business associations/ advisory councils, such as the Foreign Investors’ Council (FIC) chaired personally by the head of state, and the Prime Minister's Council on Improvement of the Investment Climate organised together with AmCham.

The National Investment Strategy for 2018-22 tops the list of initiatives (drafted by what was then the Ministry of Innovation and Development and the World Bank with input from foreign investors submitted via the forums already mentioned). This strategy identifies priority areas for investment, including areas with current potential (the food industry, deep oil processing, gas and minerals and machine engineering) and others that hold promise for the future (ICT, tourism and finance). The strategy also identifies 36 countries that offer the potential for closer cooperation, including 11 priority countries (the US, Russia, the UK, Germany, France, Italy, China, Japan, South Korea, Turkey and the United Arab Emirates). The industry and country priorities identified in the strategy will help to achieve the desired results.

What should companies that wish to do business in Kazakhstan consider?

Modern investors (especially now, with a wide choice of countries to invest in) are paying increased attention to transparent and predictable legislative environments, the rule of law and independence of the judicial system. They naturally want to safeguard their investments and to be able to rely on the market in the long term. In this respect, while Kazakhstan has made great strides by undertaking major reforms, there are still many areas where improvements are required. One of the most common issues raised by existing investors, both foreign and national, is the rule of law. While the laws and regulations have been significantly improved, the lack of consistency in their application continues to be a challenge. Often, decisions made by local authorities are not consistent with how investors read the applicable legislation. The resolution of such cases, including tax and customs disputes, is typically a time and resource-consuming process.

On the other hand, human capital constraints, as in many other countries, must be carefully considered. The lack of qualified personnel in quite a few industries coupled with relatively tough regulations for importing foreign labour place staffing issues at the top of many businesses’ agendas. Many companies, foreign and local, have addressed this issue by setting up their own corporate universities/academies of business to bring up the desired number of trained professionals fitting their requirements.

You were recently elected the Chairman of the Governing Board of the Kazakhstan Foreign Investors’ Council Association. Tell us more about what your role would include and what your plans for it are.

Kazakhstan Foreign Investors’ Council Association (KFICA) could be briefly described as the foreign side of the above-mentioned Foreign Investors’ Council (FIC) chaired by the President of the country. EY has been an active member of the FIC since 2001.

I have been a member of the Operating Committee of FIC as well as a member of the Governing Board of KFICA and for about eight years now. I have also served as KFICA’s treasurer for the last three years. Apart from that, I have co-chaired the Council’s Investment Policy Working Group (IPWG) since 2011. In IPWG, we collaborate with the Ministry of National Economy, with the Minister being the other co-chair, by formulating and executing an annual action plan. The plan includes a number of issues pertaining to and impacting the investment climate in Kazakhstan. In my capacity as the IPWG co-chair, I have led the policy dialogue with the Government side in terms of the improvements required for the business and regulatory environments to make the country’s investment climate more attractive.

Now that I have become the Governing Board Chairman, my role will be more around leading KFICA’s overall collaboration with the Government. To this end, I will actively engage with the President’s Administration as well as the top Government members (including the relevant ministers) to facilitate the work of FIC and KFICA. I will also support the activities of the working groups constituting the main platform through which the FIC’s most important work is carried out. (Apart from the above-mentioned IPWG, there are three other working groups: Energy, Human Capital and Joint Events.) There are other strategic and administrative tasks I will tend to.

In doing all of this, I am honoured to work alongside six other Board Members and four working group co-chairs representing a good mix of different industries. I must, of course, mention the entire KFICA, which currently consists of 32 members and five observers. I take pride in being a part of this great group of company executives and their GRs and to have the opportunity to contribute to the policy dialogue with the Kazakhstan side aimed at enhancing the country’s investment climate.