Taking on a business partner - issues to consider

If your business is growing, you will probably need to take on additional manpower. 

If you are a cash rich business with a strong cash flow position, you can buy the skills you need through taking on an employee or using a self-employed contractor or consultant, without giving away any equity in your business. 

However, there may be circumstance which make taking on a partner an attractive proposition. Here are some pros and cons of taking on a partner for you to consider before committing to a partnership agreement.

The advantages of taking on a partner

1. Creativity. The old adage holds true: two heads are better than one. Taking on a partner can increase creativity.
2. Complementary skills and abilities. If you take on a partner with different areas of expertise from yourself, this will strengthen the business.
3. Sharing the load. Bringing on a partner will mean sharing the heavy workload of the sole trader and sharing the risk associated with running your own business.
4. Motivation. A partner will be motivated to work for the business more than an employee or contractor as they jointly own it.
5. Capital input. A new partner will typically buy into a business, bringing an influx of capital which can be used to finance growth.

The disadvantages of taking on a partner

1. Equity split. A partner will be taking a share of the profits. This has to be weighed against the additional benefits that they will bring to the business.
2. Liability. In a standard partnership arrangement, the partners are jointly and severally liable, meaning that they are jointly responsible for the debts of the business, whoever incurred them.
3. Control. Taking on a partner necessarily means some loss of control as you become jointly responsible for decision-making. If these responsibilities are not spelled out at the start, then this is likely to be a source of conflict.
4. Disagreements. You may find that your partner has different long-term goals or different working patterns or that you have disagreements about the way things should be done. These are issues which need to be discussed before entering into a partnership arrangement.
5. Irreconcilable differences. At some point, one or both of you may want to dissolve the partnership. If you have not agreed on an exit strategy, this could lead to the collapse of the business.
6. Partnership tax return. A partnership has an additional level of reporting responsibility. A new partnership must be registered with HMRC immediately and in addition to each partner’s individual tax return, one of the partners must complete the partnership tax return stating the profits of the partnership and each partner’s share.

Dorset Chamber of Commerce and Industry

We've invited Dorset Chamber of Commerce & Industry to make a guest post, to let us know what they offer to the county's businesses.

Established in 1949, Dorset Chamber of Commerce & Industry has a long and proud tradition of serving the business community.

The Chamber represents businesses of all sizes and sectors from across the County of Dorset and beyond delivering the very best services, business information and advice. We are here to support your business throughout its lifecycle from start-up, development, growth and beyond.

Membership of Dorset Chamber of Commerce & Industry focuses on three key elements; Profile Raising, Networking and Business Support:

Raising Members’ Profile in the area
Your press releases submitted into our monthly Dorset Business Magazine, distributed to 5,000 businesses in Dorset
Company profile on Dorset Chamber website
Entry into Member2Member discount scheme
Unique Event Sponsorship & Marketing Opportunities on the Newsletter and website
Access to Membership Database

Networking
Discounts on our 70 events held each year, including Breakfasts, Lunches and Dinners
Structured Table Moves for you to meet complementary business people
Exclusive Signature Events aimed at MD’s, Chief Executives and Business Owners
Discount on tickets to the prestigious Dorset Business Awards

Business Support
Discounted Training courses, on topics such as Health & Safety, Google Analytics, Social Media, Management Performance & Business Planning
Free Business Clinics
Sector Specific Tender Alerts
Access to Money Saving Services and Member2Member discounts to reduce the cost of running your business

Let us put your views to Government through the British Chambers of Commerce Policy Team

With our membership supporting over 60,000 employees in Dorset, it’s crucial that our offering reflects this, and so this year has seen a number of different benefits introduced, including the launch of two benefits purely designed for the employees of Member companies:

Chamber Online Health & Safety Training
Member companies can rest assured that their staff are compliant with requirements of the Health & Safety at Work Act 1974 through this cost-effective and easy to use online training tool. Courses covered include general H&S subjects, plus industry specific courses.


Chamber Health Affinity Programme
With rising levels of sickness in the workplace and absenteeism, this is a topic high on business owner’s agendas. In association with Nuffield Health Bournemouth Hospital, Chamber Health Affinity Programme allows managers and staff of Dorset Chamber Member companies to take advantage of benefits including discounts on diagnostics tests and hospital fees for in-patient procedures, access and discount for Nuffield Health Bournemouth Hospital’s Private GP Service, health screening and wellness tests, plus free health specific clinics and Education Events.

Not only can we offer all these benefits through our standard membership, but we can also offer enhanced benefits through our Patron membership.

Recognising that every business has an individual set of requirements, we launched two new tiers of Patronage this year, expanding our offer to Bronze, Silver and Gold packages.


For further details on membership to Dorset Chamber of Commerce & Industry, please go to our website www.dcci.co.uk/membership or contact Karen Homer on 01202 714809 / karen.homer@dcci.co.uk

All VAT returns must be made online from April 2012

If you're still submitting VAT returns on paper, be prepared to switch to doing it online by next April. You'll also be required to make VAT payments electronically, rather than sending a cheque.

At the moment firms with a turnover in excess of £100k, or which are newly registered, are required to make their VAT returns online and make electronic payments.

But all returns and payment for VAT accounting periods starting on or after 1 April 2012 must be processed online and electronically, for firms of all sizes.

HMRC is encouraging businesses to switch from paper to online processing as soon as possible, to avoid the last minute rush.

The benefits of online filing of a VAT return include:

- an automatic acknowledgement that your return has been received
- a useful arithmetic checker to help make sure you’ve done your sums correctly
- an email alert to remind you when your next online return is due (after April, HMRC will stop sending out paper returns to customers who are now required to file online).

To file your VAT return online, you’ll need to register for HMRC’s VAT Online Service – visit www.online.hmrc.gov.uk and click “Register” under the “New user” section. Then follow the instructions.

You'll also need to set up your preferred method of electronic payment. Visit www.hmrc.gov.uk/payinghmrc/vat.htm for more information on the options available.

More help and advice can be found on the HMRC’s website at www.hmrc.gov.uk/vat. If that doesn’t answer your questions, call the VAT Online Services Helpdesk on 0845 010 8500 (available between 8am and 6pm, Monday to Friday).

Dorset Professionals Group celebrates its first Christmas

This is a guest post from Matt Haines, who recently started a new Dorset business networking group.

Following on from a hugely successful first event in September, Wednesday 14 December sees the Dorset Professional Group's Christmas Quiz Night at The Colliton Club, Dorchester.

I formed the group, with the support of Old Mill, after noticing an opportunity for a more social, relaxed networking event in the area. The group is aimed at professionals in Dorset who are below Director/Partner level, with the view of creating a second tier network which, over time, develops into the top tier. The relaxed atmosphere allows members to get to know each other on a more personal level, which can surely only help a professional relationship to develop!

Our first event was a skittles and curry night at the Victoria Hotel, Dorchester. Attendance was phenomenal with over 30 solicitors, bankers, accountants, land agents and other professionals turning out to take to the alley! A champagne prize draw was well received at the end of the evening - something which will be repeated at future events.  We used this night as an opportunity to get feedback on how members would like to see the group operated, as well as proposals for future events. The general consensus was a quiz night...so that's what we're doing!

Due to the time of year the group is having to compete with the office party season but early indications are that we have been victorious, with around 30 people expected for next week's event. A mixture of both familiar and new faces are due to attend and pit their wits against some questions carefully crafted by myself and Old Mill marketing manager, Kim Lowe. Fans of The Office will be pleased to hear that currently there are no plans to settle tied scores by hurling shoes over the venue...but all could yet change!

My vision for the future of the group is to hold a quarterly event, rotated between Dorchester, Weymouth and Bridport. To maintain numbers at current levels would be a fantastic achievement, but, being an optimist, I'm always looking to improve so I'm hoping to continue to build numbers as the group evolves.

Lastly, a couple of "thank you's" to Weymouth & Portland Chamber of Commerce, and Barry White of Humphries Kirk for their kind support in helping the group's invites reach the masses. Something I'm extremely grateful for.

For further information on the group, or to register for events please contact me on the following:

Emai: matt.haines@oldmillgroup.co.uk
Telephone: 01305 755640
Twitter: @OMDorsetProfs or @Matt_Haines_ACA
www.oldmillgroup.co.uk

ID Group makes a national treasure movie

Dorset design and marketing company, ID Group, has completed an exciting element of the new Mary Rose Museum in Portsmouth.

Due to open in late 2012, the £35 million project will combine the best 21st century design and construction methods to showcase the remains of the historic Tudor warship.  Bournemouth based ID Group has produced a CGI film detailing key aspects of the new museum, as well as bringing historical drawings to life.

The film has been shown to a number of audiences, including HRH Prince Harry, The Mary Rose Trust and its donors. It was also presented in Paris at the international conference of Bouygues, the global construction and services groups, of which Warings, who are building the museum, are a part.

ID Group Managing Director, Mark Masters, said of the project: "We had to depict a new building by creating areas from scratch so the Mary Rose Trust could see for the first time how the museum will look when walking around the interior. We also had to highlight how some of the conserved artefacts recovered from the site would be displayed."

Next year will mark 30 years since the nation was glued to the television watching the Tudor warship breaking the surface of the Solent. To mark the anniversary, the Mary Rose Trust will open the new museum, bringing the hull and many of the 19,000 artefacts that were raised with her together once again.

Mark said: "The computer generated images highlight what it was like for the 500 men on board the Tudor warship and work as a teaching tool as well as providing insights into the future for the museum.”

Warings Technical Director, Colin Tedder, said: "The museum represents the very best in modern architecture and is designed to sensitively display a collection of genuine historical significance. The CGI film captures precisely our intentions and adds a whole new dimension."

The film will be shown to further audiences in advance of the opening of the new museum. It can be viewed here.

Dorset accountants Inspire named best independent firm in south west England

Poole based accountancy firm Inspire has won recognition for being the most forward-thinking independent practice in the south west of England.

Inspire has been awarded the title 'Best Independent Firm' in the region at the British Accountancy Awards 2011. The ceremony, held in Old Billingsgate Market, London, was attended by over 800 representatives from many of the UK's leading accounting firms.

In awarding the title to Inspire the judges said: “This was an easy choice. They impressed their clients, were innovative and showed good involvement in the community. They caught our attention with their international focus and expert focus.”

Inspire was founded in 2004 with a vision of being a proactive and relationship-based advisory firm serving entrepreneurs and owner-managers.

Speaking of the achievement, Warren Munson, MD of Inspire, said: “This is another great achievement for Inspire and our team. We pride ourselves on being different to other firms in the area by focusing on real business needs and offering true value added services to our clients in addition to standard compliance.”

This isn't Inspire's first accolade. In 2009 they won the Accountancy Age 'Small Firm of the Year' award.

The British Accountancy Awards are the only awards dedicated to the accountancy profession in practice. They are run in partnership with the ACCA, a leading professional body, and succeed the Accountancy Age awards.

Well done to everyone at Inspire for raising the profile of accountants here in the south west of England.