Thursday, November 12, 2015

bonkers? why I'm staying as a sole trader, and not setting myself up as a limited company

Many freelancers and the self-employed are also limited companies – while this isn’t a pre-requisite for anyone wanting to go into business for themselves, many see it as an attractive option for all sorts of reasons including “tax efficiencies”, limiting personal risk, and being able to more easily engage with some procurement systems of other organisations so that they can do business with them.

But I chose a long time ago not to incorporate myself (despite the apparent benefits that doing so would offer me), and I thought it was about time as to why I ‘fessed up as to why this is:

  1. the tax question – although I don’t know of any empirical studies to back this assertion up, my perception is that most self-employed who incorporate themselves do so to take advantage of the different tax rules that apply to companies, and as such are able to reduce the extent of their earnings that are ‘lost’ to tax payments. But I actually feel quite privileged to be able to pay tax, and while I may not fully agree with how the government decides to spend it all, I like knowing that there’s money in the pot to pay for teachers at the schools my boys go to, for hospitals to be able to stay open, and for street lights to be able to stay turned on at night. It’s also a way that I can further manifest some of my Christian values – I can’t practically care for all of my neighbours in need everywhere, but through tax payments, I can know that there’s emergency help available to them when they might need it most (wherever they may be in the world).
  2. the risk question – given that in the eyes of the law, a company becomes a legal person in its own right, then if things start to go ‘pear shaped’, its the company that would take the hit not the individual person. And while this may be more appropriate for some with regards to the types of risk their business may entail, for me, I’d be concerned that it would start to make me less stringent with myself: after all, if I knew that if things didn’t work out I wouldn’t have to take legal responsibility for any fallout from clients, investors, etc, why should I try harder to make sure it works? 
  3. the ability to get work –oddly, most local authorities can’t directly commission me because of the way in which the rules they have to abide by work, yet national government departments and bodies have never had any issue with contracting with me... however, I am aware that in some instances, I can’t bid for contracts because I’m not the ‘right shape’ (i.e. not a company). But there are ways around this that I think are actually more beneficial in the long-term: I can collaborate and partner with other companies to jointly bid for these contracts, and in doing so build more mutual support and resilience into myself and other companies – better relationships all round, rather than trying to do everything by myself (and it can be lonely enough at the best of times in being a freelancer).

So there you have it – the reasons why I’ve no immediate desire to incorporate myself into a company (other than the hassle of the extra paperwork it would entail...)

But maybe I’ve missed the point somewhere? Would be very keen to hear from fellow freelancers and self-employed to know why they are/are not companies themselves...

Saturday, October 10, 2015

crystal ball or disco ball?

One of the tough things about being an entrepreneur is however hard you try, you can never fully predict the future.

One of the other things about being an entrepreneur is that when you look back, you realise you've usually a lot of achievement to celebrate.

So which is more important to focus on having? - a crystal ball to try and second guess what everyone else is going to do next so we can sidestep the coming poop and make sure we're in the right place at the right time, or having a disco ball to remind us to celebrate our successes and renew our excitement for taking on whatever comes next?

Of course - it's not really an either/or question: we need to have both in whatever enterprises we create or are part of. The tricky part is not only reminding ourselves that we have them, but also to get them out from time to time.

(for the record - I take a disco ball to every startup I support as a gift to their first office warming party)

Thursday, October 1, 2015

turns out being one of the UK's top10 business advisors isn't as impressive as you might think...

One of the things that makes me a little unusual as a consultant is that wherever possible, I don't give my clients a bill - instead I prefer to work as an associate of other agencies who hold contracts with various funding bodies and can cover my fee on their behalf (a very equitable arrangement: groups can access the support they need, funders get their boxes ticked, and I get to keep the cats fed!).

And one of the bodies who I've been working with through this arrangement with for about 10 years now is the Plunkett Foundation - a body built on knowledge (rather than money), and who believe that democratic ownership and accountability of rural enterprises to/within their local communities makes them not only more sustainable, but more successful in addressing the social issues those communities face.

And although I've always had a good working relationship with them, I've never actually had any formal induction to 'the Plunkett way' - at least, not until now!
As part of their refreshing of their associate list and expanding this family of advisors who can be deployed throughout the country to support rural co-operative enterprises, they're having a roadshow to allow us to all start to meet each other (and get to grips with their new reporting systems!).

I was able to get to one of these events earlier this week, and (despite the lack of cake at lunchtime), found it a really enjoyable experience to be able to spend time with some of my peers and also reflect on the proud history and role Plunkett is committed to making today in improving rural lives together. It was also great to finally find out exactly what 'the Plunkett way' of doing this is, and to also realise that this family of Plunkett advisors I find myself being part of are a very exciting bunch. After all, where else would you find people who are:
- descendants of kings,
- tv celebrities,
- best selling authors,
- castle owners,
- vampire bat handlers,
- professional revolutionaries,
- football club club owners,
- supporters of Rochdale FC (the team my dad used to play for!),
- accidental train drivers,
- dog sitters for political party leaders, and
- speciality pig breeders?

I used to think that my opening professional introduction of being named as one of the UK's top10 business advisors was pretty impressive, but in light of the above, realise that there are far more exciting vocations and credits that get us excited. Thank goodness people are still calling me a 'social enterprise sex god' on twitter...

Tuesday, September 15, 2015

"we're going to sack our accountant and swear more..."

I had the pleasure this afternoon of spending time with the soon-to-be-graduating cohort of the School for Social Entrepreneurs North West's #scaleup programme - over the last year, this group of social entrepreneurs and social enterprise leaders have been exploring how they might best grow their respective ventures to create even more transformative impact in their local communities.

I'd structured my session with them to be largely open so as to offer anything that they might still need to learn with regards to specific pieces of information, contacts, and suggesting approaches to issues that they might not have considered before (including encouraging them all to watch Yes, Minister!). But principally I wanted to help them to formally reflect with each other on what they'd got out of being part of #scaleup, and what they'd be taking from it as they entered the next stages of their respective journeys, both personally and as an enterprise.

Many took the time to personally thank me as they left the session (always a good sign!), but what I felt was most useful from the session from my perspective was asking them all to share what one thing they'd now learnt that they didn't know when they woke up this morning, or one thing that they'd now do as a result of the day. This helps me understand the impact I've had, and while some of their responses were encouraging, I can't help wondering if I may have (accidentally) gone too far with some of them...

  • we're going to find a social investor
  • we're going to apply to Power to Change
  • I'm going to start claiming more allowable expenses from HMRC (specially in relation to mileage rates for bicycles)
  • we're going to change our accountant
  • we're going to apply for Social Enterprise Investment Scheme tax relief
  • we're going to apply for membership of Locality
  • we're going to make changes to our financial management
  • I'm going to eat more salad
  • I'm going to go 'back to basics'
  • I'm going to swear more

What social entrepreneurs personally gained from being part of the programme

How social enterprises have benefitted from being part of the programme

Monday, September 7, 2015

widening gulf in social enterprise sector revealed by new support programme evaluation?

I always try to support enterprises at whatever stage they’re at, and with whatever aspirations they may have – to this end I’m an approved/registered provider through a number of programmes, including Big Potential:  a national programme enabling social enterprises better explore and pursue social investment as a means to support their growth aspirations.

Usually, such support programmes only reflect on their success and impact at the end of their life, but encouragingly some, like Big Potential, are taking a more dynamic approach with annual evaluations to help them enhance their impact over their lifetime.

And Big Potential has recently released the first of its annual evaluations on its performance, and me being me, I wondered what its findings might tell us if taken with some additional external benchmarking (something which many programme evaluations omit to include). And that’s because without this benchmarking it’s hard to gauge how far any evaluations' recommendations may be pertinent in the wider context of the population of enterprises they’re aiming to engage and support.

So, what did I find?

Well, there’s lots of mapping of social enterprises that are published annually, but these are usually exclusive to particular types of social enterprise (co-operatives, development trusts, etc) rather than all of them (which Big Potential is concerned with), so I chose to look to Social Enterprise UK’s latest published mapping as the most relevant benchmark. Admittedly, it’s from 2013, and while a refresh of it is scheduled for sometime this coming autumn, as an initial rough reference I felt it’d serve its purpose for doing some comparative analysis over lunch...

And rather than bore you with various comparison tables here, there’s some striking headlines that seem to appear when you compare Big Potential’s profiling of the social enterprises they’re engaging with against the wider population:

1)    they’re bigger – a typical Big Potential social enterprise’s turnover is £298,405, a typical social enterprise turnover is £187,000; also, the average investment (borrowing) they’re ultimately seeking is about £100,000 greater than for social enterprises in general;

2)    they’re younger – 7 years vs. 24 years;

3)  they’re more hyper-local: the proportions of Big Potential’s social enterprises whose reach is at both neighbourhood and local authority area is higher than the national trend.

So – is Big Potential seeing a new class of social enterprise emerging: new kids on the block who are much more locally focussed and ambitious that the wider sector is? But is there also a potential concern regarding that ambitious growth within this: if their reach is so local, that surely means limited potential for future growth, unless they start to monopolise local marketplaces and so reduce provider diversity and choice?

Of course, this is all highly tentative based on some headline published figures from the first annual snapshot of a new programme that I’ve looked at over a cheese sandwich, but it does seem to suggest that Big Potential is getting it right: it’s only capturing those enterprises who are ambitious for growth - an ambition that isn’t necessarily reflected in the wider sector with nearly half of all social enterprises who approach Big Potential being deemed to be ineligible to apply for support, and only 1.5% of those who are, going on to make a successful application. I'm looking forward to their next years' evaluation and the updated mapping of the wider sector to see what might come next... 

Friday, August 7, 2015

Why I'd like to be in membership of a golf club

Most of us know the clich├ęs about being a member of a golf club – you don't join to improve your game, or because you necessarily enjoy playing it, but because it affords you the opportunity/excuse to spend significant time with business prospects/partners/customers away from the usual day-to-day contexts and pressures of the work place;

it's an opportunity to cement and maintain key strategic business relationships – and relationships are best nurtured where people can come together around a neutral or mutual interest, hence the rise of the golf clubs historically, and why most members of golf clubs today are 'professionals' not in golf, but in various fields of business;

and you know what – it's about time I got in on this act! I spend a lot of time impacting upon the world and supporting others through various networks and relationships, but there's a gap in how I do this that it's about time I addressed.

I want to take up membership of a golf club. But which one? As a reader of this blog, you'll know that I can be a little unconventional at times, and don't usually wear suits or ties – and that will likely mean I struggle to even been invited to discuss any application I make to many such clubs, but that won't deter me. I need to find a golf club where I can meet like-minded people, where I can be proud to invite people to meet me at and spend time together, and have the knowledge that whoever I'm entertaining as my guest, they'll enjoy themselves.

So there's really only one golf club that I'd like to be a member of – crazy golf!

Friday, July 17, 2015

are freelancers modern-day prophets?

over the last few years there's been increasing interest and excitement about the rise in the number of freelancers and the attractiveness of this way of working, but I'm wondering if there's a role that if freelancers accepted and adopted, might see them make a truly transformational impact upon our economy and society;

as a freelancer myself, I've spent a lot of time thinking about the implications that this has with regards to earnings, my family, etc, but I've also explored it within the context of leadership - inspiring and influencing others on both individual and corporate levels. And through this reflection have realised that freelancers have a considerable amount of political freedom to speak out and challenge accepted norms and the things that government and other businesses do in ways that non-freelancer's can't;

you see it's all to do with employment legislation - if I'm your employee then everything I do and say is a reflection of your company by default. That means that regardless of how I may feel about the way a company has behaved or a specific government policy or legislation, I can't easily speak out about, or challenge, it without risking embarrassing my employer and so finding myself in breach of the trust with them them underpins my contract of employment;

freelancers have no such 'limiters' - we're much more free and able to publicly decry or challenge the behaviour of institutions and the State than others: much in the way that the prophets of the Old Testament scriptures did. Read through the stories of their lives again, and you'll see that they were willing to not only speak out against injustice and wrong-doing by the powers that be/were, but also to do it when it made them unpopular or placed them at risk of sanction and prosecution from the authorities of the day because no-one else was willing or able to stand up say something wasn't fair or right;

and in my own experience as a freelancer there are times I've taken on this role: publicly speaking out against the CIC legislation at a time when everyone else would only say how great it was. This led to my receiving some unwelcome interest and attention from some quarters, but hushed whispers of encouragement from people who were employed in the same organisations who were publicly praising it, and subsequently led to the legislation being changed!

Which brings me back to my idea about freelancers and prophets - in not having contracts of employment we're incredibly liberated to speak out against injustices and bad management by the powers that be, and in doing so can start to bring about a fairer society and economy for all. But dare we risk doing so?