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Energy prices have risen rapidly recently, and as a result, many households and businesses have looked at their monthly gas and electricity bills with a look of astonishment over how much they’ve been charged by their supplier. As a result, many energy companies are trying to persuade unhappy customers that, by switching to them, they can get a better deal, but is this actually true? It might sound tempting, but some energy suppliers contact people either door-to-door or via telephone without actually giving them a better deal after switching, which can be misleading.

Energy regulator Ofgem, which oversees energy companies in the UK including the so-called ‘Big Six’, says that if businesses and households are unhappy with their current energy supplier because they’re paying too much, they could switch in order to save money. Ofgem state that by failing to switch supplier, businesses could be spending at least £100 a year more than is necessary on their energy bills, which for smaller companies can be a significant amount of money that’s wasted.

To make sure that consumers are aware that they can find a cheaper deal elsewhere, Ofgem and Citizens’ Advice are launching a switching campaign called Energy Best Deal. The campaign claims that, by switching to a different energy supplier, businesses and households could save up to 40% on the cost of energy. The campaign states that, by making enquiries to several energy companies, trying to take advantage of special offers and visiting price comparison websites such as Make It Cheaper energy saving, it’s possible to cut energy costs without too much hassle.

However, switching supplier usually takes between six to eight weeks, so to get it done businesses need to allocate themselves time for it to happen, and they should remain patient. Also, businesses are advised to look at different companies, including smaller energy suppliers, to see what they have to offer. An increasing number of businesses are making the decision to switch to a smaller energy supplier from one of the ‘Big Six’ energy companies for several reasons. A spokesperson from makeitcheaper.com explained why:

“A number of our customers said that they trusted smaller energy suppliers more than the Big Six, especially because of their more reasonable prices and customer service. On top of that, 55% of those we spoke to said that billing issues were problematic, with 40% talking about poor customer service provision. Make It Cheaper was set up so that anyone who came to us would find the best possible deal for energy prices and customer service.”

or any businesses who may be interested in saving money on energy costs, they are hosting a two-hour free event in Twickenham, where Liberal Democrat MP and Business Secretary Vince Cable will be doing a Q&A session on small business issues. Anyone who attends can also network while receiving advice on how to save money for their company. It takes place at The Albany, 1 Queen’s Road, Strawberry Hill, Twickenham TW1 4EZ, and is on from 6pm-8pm.

An electronic download is comes under the definition of an Information Society Service whose definition is “Any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, and at the individual request of a recipient of a service.”There are certain rules and regulations, some of which are different to the regulations governing typical goods and services transactions. In order to comply with these rules, and not avoid fines and/or penalties, here is what you should know:

Electronic Commerce Regulations

Electronic Downloads are regulated in Europe by the Electronic Commerce regulations (ECRs) that came into effect in in August 2002 with the purpose of ensuring free movement of ‘information society services’ across the European Community. These regulations cover not only all EU Member States but all countries within the European Economic Area (including Iceland and Norway). The ECRs cover any marketing or selling of goods/services via the internet, email, interactive TV or texting and cover both B2C and B2B transactions. The ECRs stipulate the information that your company is required to provide your customers in all circumstances, including when you supply an information society service, when your contracts are concluded by electronic means and when you send out any commercial communications. The information that you are required to provide is mostly quite simple, such as the full name of your company and your VAT registration number, but for other information your company may be required to have processes in place to deal with them (you need to decide the technical steps that your customer must follow to conclude a contract and make them perfectly clear to all parties involved in the transaction.)

VAT on Electronic Commerce Transactions

The legislation surrounding VAT and electronically supplied services are some of the most complicated around and many will need to be reviewed on a case-by-case basis. Generally an electronically supplied service supplied in an EU Member State is taxable at the standard rate established by a Member State, unless an exempting provision in a Member State applies.

1. Supply to UK customer

Where a supply is made to a UK customer, the place of supply will be the UK. As a result, UK VAT will be chargeable at the current standard rate of 20% on these sales. This applies whether the customer is a business or private individual.

2. Supply to overseas customer

Where a supply is made to a company that is based outside of the UK, the treatment will depend on whether the customer is within or outside the EU and also whether the customer is receiving the supply in a business or private capacity.

Supplies to businesses

Under the General Rule for B2B transactions which was introduced in January 2010, the supply to a business in another EU Member State will be outside the scope of UK VAT. The business customer then accounts for the VAT due in their Member State under the reverse charge. Therefore, Incisive Media will not be required to charge VAT where the supply is to a business in another EU Member State. Incisive Media will need to complete an EC Sales List in respect of this transaction and meet the invoicing requirements.

Where the supply is made to a business customer based outside of the EU, this is deemed to be outside of the scope of UK VAT, and as a result, no UK VAT is charged. It is important to note that Incisive Media must be satisfied that the supply is genuinely used outside of the EU (rather than to a non-EU business who will effectively use the supplies within the EU). It is also necessary to recognise that if the customer is in a non-EU country, there may be VAT issues in their country, for example if the download is provided to them from a server in their own country. This would require consideration of the matter on a country by country basis.

Supplies to private individuals

If the supply is to a private individual in the EU, the supply will be liable to UK VAT at 20%. This is changing on 1 January 2015 when VAT will be due in the Member State of the customer – this will require local VAT to be charged by Incisive Media but there will be a one stop shop available.

If the customer is a private individual outside the EU, the supply will be outside the scope of UK VAT. However, as with the supplies to business customers, there may be VAT issues in the country of the customer. For example, in both Norway and Switzerland, there may be a requirement to register and charge local VAT because of legislation that has been introduced. We can advise on a country by country basis if required.

The 2008 recession might have been a few years ago, but the British population are still coping with the initial shockwave as well as dealing with the financial aftershocks. The economic downturn has made many businesses go bankrupt, and if you’re a small company looking to expand, it’s proving to be extremely tough to get a loan or financing.

Seeing as the banks started the problem in the first place, you’d expect a little help somewhere along the line in order to get your finances on track. However with the list of ‘high risk’ businesses on the rise, banks are closing up shop and refusing to lend to new starters who can’t produce a big enough return. If you’re a small business or you’re looking to start one up, here are a few tips on how to raise some much needed cash to get things going.

First things first…

Check out Social & Peer-to-Peer Lending

This type of borrowing has become increasingly popular over the last few years, with young entrepreneurs choosing to find finance online instead of camping outside the banks. Simply put, social lending puts your needs in touch with people online that are willing to help you out. A broker will determine the amount of money you need, and then put you in contact with people online that are willing to lend the same amount. Basically, you decide the type of the loan, the length and how much interest you want to pay, and then the broker matches your credentials with lenders. This way of lending has many benefits, most notably not involving any banks or institutions. Both borrower and lender get better rates than if they were to go through a bank too. Just sit back and let the site compile all the necessary paperwork and transactions!

Crowd-Sourced Funding

Similar to social lending, crowd-sourced funding also involves a network of people lending money. However instead of a set amount, the individuals involved in crowd-sourced funding lend as much or as little as they want, backing a project instead of loaning cash that could be for a number of things. For example, crowd-sources funders may lend money to a project they believe in, whether it’s a film, an album, or a product. In return for the cash loan, the investee will offer rewards related to the project, maybe a credit in the film, or a song title on an album. They may even name their product after an investor. The size of the loan will depend on the size of the project, and terms/rewards will have to be ironed out and put on paper before any cash is exchanged.

Angel investors

Relatively new in the lending business, put simply, these investors will front large amounts of money in exchange for equity in your business when the banks aren’t interested. If they believe in your business, they’ll back it, however they will need to see detailed and convincing business plans which show a return on their investment – if your pitch isn’t right, you’ll lose the cash!

Small companies are the backbone of UK corporate land and David Cameron, Britain’s Prime Minister, no less, has recently said that he believes that they are crucial in creating jobs, wealth and opportunity. Small businesses are seen as having a key role to play in play in the UK’s economic recovery – more major economic turmoil from continental Europe notwithstanding.

Even so it is still depressingly tough for small companies with a host of problems to overcome and it seems little in the way of real meaningful support from government or the banking sector. For them, it appears, that any kind of business lending is just still too difficult or unattractive.

Moreover, smaller companies are often finding that they are being squeezed financially by larger ones who are effectively using their size and power to dominate smaller companies and use them in effect as a source of finance. According to the Federation of Small Businesses’ statistics as many as 30% of small businesses say they are being paid late on a regular basis.

Whilst there is some legislation around to prevent this (late payment interest etc.) many small companies are reluctant to use these methods as they risk damaging the relationship with their customers.

There are a few practical things that all companies (even the larger ones) should do to help minimize late payments and reduce the pressure that this puts on cash and the ever increasing risk of default.

Firstly make sure that your terms of payment are agreed in writing. See a lawyer if you haven’t already got some well written and legally enforceable Terms & Conditions of sale.

Make sure you have a formal system in place for credit check all your customers. There are many ways to do this with a number of web sites available online, it doesn’t cost very much and it is quite an easy thing to do. This will help you to make informed credit decisions and many of them will tell you if your debtor has a track record for paying people on time.

Try to have a champion at your customer (usually the person buying your goods or services) who can help pressure the finance department if needed and will help smooth out any issues.

Make sure you get your billing right, errors and omissions are the commonest reasons for delayed payment. Don’t provide your debtor with any excuse; check and double check names, addresses, purchase order numbers, prices and all calculations.

Make sure that you or someone in your team calls your debtor well in advance of the invoice falling due for payment to make sure it has been received, is being processed and that there are no problems with it – don’t wait until it is overdue.

Review you overdue debts position regularly (create an aged debtors report) and make sure that all overdue debts are escalated for management intervention.

If you run a hair or beauty salon, or indeed, any customer facing business, market positioning and a robust business strategy is essential.

Understanding your unique selling point

Good marketing starts with knowing your customer and your competition. Start with your customer in your target market. Think about the services or products you are selling and who you’re selling to. Then look at competitors who are offering similar things to you. Where are they strong and where are they weak? Are their goals clear and how do they attract customers? Is there something that makes them stand out from the rest of the market?

You need to gather as much information about the market and the competitors in it as you can and work hard to understand them. When you have this information, you can start to see how you fit into the wider market and where you can stand out with your competitive edge and ideally a unique selling point that isn’t offered elsewhere in your target market. For example, you might offer a superior customer service that’s accredited to external standards and known by everyone who steps into your salon. Exceptional professionalism, service, friendliness and standards are key to attracting and retaining your customers. A great service strategy can allow you to charge healthy prices rather than targeting the price conscious section of the market that may simply chase the cheapest deals rather than build up repeat custom to a single provider.

Another great differentiator is product, particularly in the health and beauty industry. For example, you might look to offer innovative services such as micro-dermabrasion and bee ‘venom’ facials, or gigi brazilian wax products to tempt in your customers. Innovation in this industry is a vital marketing strategy, as many customers love to try out the latest products and services and keep up to date with trends and developments in the market.

Marketing yourself

Make sure you understand your proposition and positioning before you begin to market yourself, then work with a designer to create a simple brand and logo for your business. This should then be used across your marketing channels, with everything from your business cards, staff uniforms and promotional flyers to signage, car livery and vouchers. Show a consistent brand experience by using the visual identity and language that expresses who you are. An online presence is also a vital marketing tool and getting onto social media can really boost custom. Look at working with a developer to build a simple website that explains your services and offers rapid contact for customers to book. Consider a call back system, if possible, to show that extra service.

Further considerations

As well as spending time and money on your promotions, the full customer experience will be affected by the other decisions such as how effectively you manage your salon operations, purchasing and stock, health and safety, company finances, legal and insurance requirements, staff training and more. It’s worth joining any local business support and networking groups to learn from other business owners. Think about a mentor or a knowledgeable business partner or salon manager if you are new to business ownership. The learning curve is steep, but it’s also fast and extremely rewarding!