Many small businesses will reach the point where they need to think about recruitment. This might be, for example, due to increased workload or a lack of knowledge requiring outside expertise. The problem, though, is that the business is often not bringing in the income required to pay for that additional staff member.

Knowing when is the right time to recruit is, therefore, very difficult, especially in these uncertain economic times when revenues are changing dramatically for many businesses. I know a company who was due to interview for their first member of staff and the day before the interview lost one of their major contracts. In a way they were lucky it happened before they had taken on the employee, but it does show how decisions made one day can be forced to change another. Employing staff is a huge commitment, and businesses need to understand all aspects of the contract between themselves and the employee, and that includes how they can potentially dismiss them.

Outsourcing is worth billions of pounds every year and yet there are still businesses that shy away from it due to misconceptions, which we will aim to clear up here:

Outsourcing can be too constricting

In the past it is true that some companies found themselves tied up in long-term deals with outsourcing companies that ultimately proved uneconomical and unflexible for the business. However, this is a thing of the past, and today we see shorter contracts and flexible terms dictated by the customer that result in more productive, successful relationships. Early ‘get-out clauses’ are also common.

Well, you're not alone as recent research by Business Link has found that although a quarter of employees would like to start a business a third are too scared to do so. However, what's interesting is that if those budding entrepreneurs did take the leap into business ownership and made a profit of just £1000 the UK economy would receive a massive £3.25bn boost.

With the varied support available to businesses including the £78.9m to be spent during 2011-12 on a number of programmes and initiatives designed to support UK businesses it would be interesting to understand what is holding so many people back. From our discussions with visitors to the recent Business Startup Show many people were concerned about finance, feeling overwhelmed by the tasks involved in setting up a business, not understanding what jobs they needed to undertake, not to mention the risk involved in possibly leaving employment to start the business.

All these concerns are valid and completely understandable. The good news is that they can, for the most part, be addressed.

With headlines earlier in the year like this: "Business Links to close by November as government unveils new support measures" it's no surprise that there has been a great deal of confusion about the future of Business Link. If you had read on in this particular story published on Business Zone you would have discovered that in actual fact: "Whilst the regional Business Link advisory service will close on the 25 November 2011, the Business Link website is being significantly enhanced and will provide improved, comprehensive support to businesses. New online services will be launched in November designed to help you start, grow and improve your business."

When I've spoken to people about Business Link, some said it was going completely, others that it was being streamlined and some didn't know anything about the changes at all. Somewhere along the line, then, the message has been lost, which is not good news for this large organisation. If they can't get the right message across, what hope is there for the rest of us?

It has apparently proved successful during the trial run in Merseyside this year, but will the Government’s New Enterprise Allowance (NEA) prove itself as effective nationwide? The scheme works with the long-term unemployed (receiving Jobseekers Allowance for at least 26 weeks) to provide them with the opportunity to start their own small business by offering access to a business mentor who will work with entrereneurs to put together business plans. They will also receive a £65 per week stipend for the first thirteen weeks (reducing to £33 per week for the subsequent thirteen weeks) and in addition the entrepreneurs will have access to a £1,000 business loan.

Small businesses are being targeted again with the news that HMRC is contacting over 40,000 sole traders and one man companies who they believe should be paying VAT, which is presently set at a threshold of £73,000.

 

Businesses need to ensure they are fully aware of the financial situation of their company or risk facing fines up to 100%. At present businesses that aren’t VAT registered, but should be, are being offered a partial amnesty with reduced penalties on the outstanding VAT until 30^th September, 2011. However, the HMRC has reserved the right to hand out fines up to 100% where it believes a business knew it should have been registered but didn’t come forward. How the HMRC will decide whether they believe a business knew they should have been VAT registered is not clear.

The extensive benefits of outsourcing, as shown by Paper Mountain Solutions, include access to expert knowledge that your own business does not have, plus the undeniable cost savings that can be made by choosing to outsource particular aspects of your business. To get the best out of your outsourcing partnership, though, you need to think of your outsourcing provider as simply an extension of your existing business. There are simple steps to take in order to create a mutually beneficial relationship with your outsourcing business.

 

1. Unsurprisingly communication is key, something Paper Mountain Solutions believes strongly in. It's imperative that your outsourcing provider fully understands your business plan and is kept fully up-to-date with changes and developments within your business. The flow of information, both ways, will ensure both sides are achieving the best possible results.