The British Chamber of Commerce claims that the UK Budget for 2007/08 will cost small business £1.2 billion ($2.35bn) over the next two years.

A poll showed that 71 percent of British businesses would be worse off after tax rises announced by Chancellor Gordon Brown in Parliament yesterday.

The UK’s 4 million small businesses currently pay corporation tax of 19 percent on profits up to £300,000 ($588,000). But Brown announced he will raise this by one percent each year to 22 percent by 2009.

Simultaneously, corporation tax on big companies will be cut from 30 percent to 28 percent, leaving smaller businesses gasping at the unfairness of it all.

Some attempt has been made to offset this move by allowances and credits on research and development and major business investment.

Nick Goulding of the Forum of Private Business said : “The vast majority of small businesses are not going to carry out R&D or buy new machinery every year. This is the type of one-off investment that they make at the start or every ten years”.

The move seems aimed at retaining larger companies in Britain by adjusting British tax levels to those in competitor countries, and making smaller businesses, which can’t leave these islands, pay for it.

A New Series on Business Startups — Part 2

Now that you have decided what kind of business person you are, and the general area you’d like to tackle, the next step is to select a business and get started.

First, let’s consider business types in a broad brush way. Essentially there are five sorts of businesses :

1. Making something (manufacturing)
2. Doing something (services/sales)
3. Fixing something (repairs/maintenance)
4. Creating something (crafts/arts/writing/photography)
5. Moving something (transport/removals).

If one of those immediately jumps out at you, you’ve found your compatible business area.

The next step is to break it down further into niches that particularly interest you.

The Venture Concept
When you’ve hit on an idea that sets your pulse racing, you next need to define the venture concept in more critical terms. Does the enterprise have any particular conditions calling for special attention? It’s rare to find any venture that doesn’t. For example, does it require action arising from :

* Special expertise required.
* Difficulties in marketing a product or service.
* Peculiar conventions in the industry.
* Technicalities.
* Specific tradesmen or professionals needed.
* Shelf life of products, e.g., refrigeration required.
* General regulatory regime.
* Specific legislation.
* Difficulties in generating business (closed shops).
* Current market conditions.
* Geographical considerations, e.g., importing bananas.

It is said that this conceptualizing stage takes up 5% of time in the pre-launch stage. In my view it take much longer : 10-20%. Don’t neglect this aspect of your business plan, or you’ll need to do it all over again if you hit the buffers, costing time, money and heartache.

It’s a good idea to note down all the ideas and decisions accumulated in this process, as that will :

* harden your knowledge of the concept
* remind you of what you’ve already discussed
* provide a list of contact names and phone numbers
* and give you a blueprint to work from at later stages of the operation.

You can’t have too much detail at the outset of any project. What you know now will determine the course you take. Too little knowledge and you’ll almost certainly make a number of false turnings.

Remember, the deity is in the detail.

Go to Part 3.

Software superstar Microsoft opens its Small Business Summit this week : “… a nationwide event that provides small businesses with the tools and information they need to help their business soar”.

Well, that’s the hype anyway. I’m guessing they hope to sell a lot of proprietary software off the back of this. And why not? Microsoft was a small outfit once, started in a garage by two geeky kids called Bill Gates and Paul Allen. Bill even dropped out of Harvard to do it. That’s what we call backing yourself — the motor of all entrepreneurial activity.

More than 30,000 small-business owners and partners from around the country are expected to participate in this free event held online with a first-day event in Redmond, Washington. The summit features more than 58 sessions covering small-business topics including branding, sales and marketing, security, business efficiency and mobility, and participants have the flexibility to join online from their home or office. In addition, small-business owners can go to their local participating CompUSA store to watch the webcasts, network with peers and have a direct dialogue with Microsoft and CompUSA representatives who understand their unique technology and business needs.

To kick this off, here’s the transcript of keynote remarks by Kevin Turner, Chief Operating Officer, Microsoft Corporation, Microsoft Small Business Summit 2007.

A New Series on Business Startups — Part 1

Many people dream of fleeing the rat race and starting up on their own. Thoughts of freedom — being one’s own boss — and all that lovely money to be made waft across the mental screens of most of us at some time or another.

But have you got what it takes to be an entrepreneur? Do you have the grit and stamina to see it through? Above all, do you have the right talents and personal qualities to succeed where many others fail?

At the outset, before the business has any assets, only one object exists : YOU.

Do you cut the mustard? Frankly, are you up to it? In this first part of the series, let’s look at you and decide whether you measure up to the most demanding of templates.

Are You a Creator or an Operator?
What attracted you to the idea of setting up a business in the first place — was it the prospect of all those creative juices running free; the fascinating research; developing a plan of action (business plan); and carving a business entity out of nothing but ideas in your head?

If you answer Yes to any of these, consider the next question : how does running the business appeal to you? You know, all the dull, day-to-day routine of office work, bookkeeping, chasing orders, attending to staff problems, tax returns etc.

Strangely, many folk prefer one or the other. Most can’t abide the thought of doing both.

If you’re a creator, you’ll build your business from scratch. If an operator, you may have to consider buying a franchise — a ready-made business with all the detail worked out and provided from a central source.

It’s important therefore to know which of the two personality types you are. If you can handle both, you are very fortunate. It’s a good idea in any case to try out a SWOT analysis and pin down your real motivations and abilities.

SWOT Analysis
SWOT stands for Strengths, Weaknesses, Opportunities, Threats.

Take a large sheet of paper and draw two lines vertically and horizontally across the middle of the paper. You should now have divided it into four equal quadrants. Mark the top left of each with one of the four SWOT categories.

Now fill in the spaces with your qualities and situation as you see them in respect of any business idea you are considering.

When you have finished, take a long, hard look at what you’ve written. You may want to move some of your items from one square to another.

The SWOT profile should give you a good basis for determining your current position and freedom to act.

A similar excercise should be undertaken with Skills, Skill Gaps, Likes, Dislikes. This looks more to your personal qualities in respect of the business proposition.

These two sheets of paper will reveal more to you than any amount of head scratching and speculation. They are the first steps toward making a success of your startup.

Go to Part Two.