finance in cornwall - 10 may 2016 (segment 2b)
TRANSCRIPT
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Finance in Cornwall 2016
Start Ups and businesses trading for < 2 years
Ivan Burnard - Partner
“Cornwall, we have lift off!”
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pkf-francisclark.co.uk
.
Structure of morning
• Background, EU “calls”, grants and Banks (8:30am to 9:50am)
• LEP, Cornwall Chamber, FSB• Grants and Banks (intro)
• Funding and Business Support – stratified by age of business (10:10am to 11:20am)
• Equity, Business Support and Company presentations (11:40am to 1pm)
• State Aid• Crowdcube pitch..
• Q&A one to one/ Networking (1pm to 2pm)
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pkf-francisclark.co.uk
8 minute presentations on:
• Bookkeeping*• Legal structures*• Start Up Loans (loan)• Approaching a bank – practical tips (loan)• Crowdfunding rewards • VAT*• Tax on Profits*• Outset Cornwall and RIO (Business Support)
• (* = inherited slots from “Start Up Cornwall”)
Funding and support – for business <2 years old
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Bookkeeping – First Steps to the CloudLucy Davis
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The Importance of Bookkeeping
We all love the day-to-day running of our businesses but its so easy to neglect doing our bookkeeping. The main reasons it is so important to keep your records up to date are:
• Decision making
• Time saving
• Save money
• Legal requirement
• Fines
pkf-francisclark.co.uk
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pkf-francisclark.co.uk
.
Cloud Accounting - The Way Forward
Cloud accounting is becoming increasingly popular as clients want to work smarter, faster and have the flexibility to run their business from work, home or on the go.
• What is cloud accounting?
• How will it benefit me? Real-time overview of financial position
Download business bank statements and import them directly
No desktop software – no backups/ risk from hardware failure
Always up to date with latest version
Multi-user access from any location
• Relevance?
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pkf-francisclark.co.uk
.
How To Get Started
The thought of setting up your bookkeeping on the cloud or changing from your current method may seem like a lot of hassle but it’s easier than you think!
• If you are a brand new business….
• If you are an Excel loving business….
• If you are already on a desktop accounting software package….
If you’re looking to start up on the cloud or make the move then be sure to get a professional involved initially, this could be your accountant or a bookkeeper. Make sure they are certified advisors.
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pkf-francisclark.co.uk
They all offer a monthly subscription which includes dedicated support from them.
Overall I would say that cloud accounting is designed for most small businesses. It is ever evolving and if it doesn’t currently meet your needs, it definitely will in the future.
If cloud accounting does interest you then download their free trials and have a play!
Cloud Accounting Providers
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Corporate Structures
Gavin Poole
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• Free information• “Corporate structures”• Choice• Tax• Liability
First steps
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• Basic questions• “Contribution to the business’s overall mission
and goals”• Not set in stone• Admin
Some lessons...
Before you start
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Responsibility
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Exit plan
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• Clarity of purpose• Responsibility• Skills• Attractive to investors• Succession planning and exit
Why this matters
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“Structure follows strategy”
“If an organisation does not know where it is going there is no intelligent basis for organising human effort and material resources”
Best structure will not guarantee results and performance but wrong structure is guarantee of non-performance.
Peter Drucker
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• Values• Behaviours• Climate
Organising human effort (cultures)
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• Insist on doing everything through “channels”• Make “speeches”• Refer all matters to committees• Attempt to make committees as large as possible• Refer back to matters that were once closed and
re-open them
1944 CIA: Simple Sabotage Field Manual
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Basic vehicles• Sole trader• Partnerships...• Trusts...• Companies...• LLPs• PLCs• Charitable Incorporated Organisations• Community structures
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Summary• Structures are plentiful• Structures are good• Documented relationships give clarity• Adding value:
o The journey is helpfulo Insurance is in place
• Lack of clear structure will become a problem• It is a false economy not to have structures
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• Bespoke• Covers key issues • Cost effective• Swift turnaround
Start-up package
Apply to Stephens Scown Cornwall Corporate Team:[email protected]
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The content of this document is classified as INTERNAL
Debt, approaching the bank – Practical Tips
Lamorna Kenna
Business Growth Enabler
The content of this document is classified as INTERNAL
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The content of this document is classified as INTERNAL
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Four things the bank will ask
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Purpose of Lending1
Amount2
Lending Term3
About your business4
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The content of this document is classified as INTERNAL
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Assessing an application, what do we look at?
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You1
Contribution2
Business Plan3
Affordability4
Credit History5
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The content of this document is classified as INTERNAL
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You
03/05/2023The content of this document is classified as INTERNAL28
Why do you want to set up in business?
Support network
Contingency planning
Strengths and weaknesses
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Contribution
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Typically 50% contribution
Demonstrates commitment and confidence in your project
Can you raise money from other sources?
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The content of this document is classified as INTERNAL
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Business plan
03/05/2023The content of this document is classified as INTERNAL30
Business Background
Competition
Route to Market
Advertising and Marketing
Your background
Breakdown of costs
SWOT analysis
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Affordability
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Cash Flow Projections
Assumptions
Seasonality
Cost of your product
How much you expect to sell
Wages
VAT
Loan repayment figures
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Example cash flow projectionJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
IncomeCapital introduced
Income from café sales 3,000 3,000 3,000 7,000 6,000 8,000 12,000 12,000 8,000 4,000 3,000 4,000 73,000
Income from art sales 500 1,500 2,000 500 4,500
Total Income (A) 3,000 3,000 3,500 7,000 6,000 9,500 12,000 12,000 10,000 4,000 3,000 4,500 77,500Cost of salesFood 1,000 1,000 1,000 2,000 2,000 2,500 3,000 3,000 2,500 1,000 1,000 1,000 21,000
Beverages 300 300 300 350 350 350 500 500 350 300 300 300 4,200
Total cost 1,300 1,300 1,300 2,350 2,350 2,850 3,500 3,500 2,850 1,300 1,300 1,300 25,200Savings for Tax 0 0 0 200 200 200 200 200 200 200 200 200 1,800
Drawings 0 0 500 500 500 500 500 500 500 500 500 4,500
Staff costs 1,000 1,000 1,000 1,000 1,500 1,500 2,000 2,000 1,500 1,000 1,000 1,000 15,500
Loan Repayments 190 190 190 190 190 190 190 190 190 190 190 190 2,280
Rent 660 660 660 660 660 660 660 660 660 660 660 660 7,920
Rates 0 0 0 0 0 0 0 0 0 0 0 0 0
Water 0 0 100 0 0 100 0 0 100 0 0 100 400
Electricity 0 0 120 0 0 120 0 0 120 0 0 120 480
Wifi/Phone 65 65 65 65 65 65 65 65 65 65 65 65 780
Insurance 60 60 60 60 60 60 60 60 60 60 60 60 720
Total Expenditure (B) 1,975 1,975 2,195 2,675 3,175 3,395 3,675 3,675 3,395 2,675 2,675 2,895 34,380Net Profit -275 -275 5 1,975 475 3,255 4,825 4,825 3,755 25 -975 305 17,920
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Credit history
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Be upfront and honest about previous problems
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Summary
03/05/2023The content of this document is classified as INTERNAL34
Have some cash behind you to get started
Have written a detailed Business plan and be prepared to answer questions about it
Have prepared a realistic Cash flow projection
Have sought help from professionals should you need any help with preparing the necessary information
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Lamorna KennaBusiness Growth Enabler
07788347064
Twitter@LamornaKenna
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SWIG Finance
John Peters, Managing Director
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We finance businesses to start or grow
+ =
We can say yes when the bank says no
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Review of 2015• Delivered record lending of £5,000,000 to 430 SW businesses• Created and safeguarded 621.13 FTE jobs • Established as leading Start Up Loans provider in the South
West• Launched the Seedbed fund for social ventures with DHT and
Plymouth University
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Lending Growth 2010 – 2015
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000458
360
153
100
37
15
Total Loans Drawn
Year
Loan
Am
ount
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Lending by County
17.9%
24.9%
7.4%18.6%
6.8%
12%
8.5%
3.9%
CornwallDevon DorsetBristolGlosHampshireSomersetWiltshire
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Funds Available May 2016• Start Up Loans - Loans up to £25,000 for businesses trading
up to 3 years in the SW with fully funded business support • South West Loans Fund - Loans up to £50,000 for eligible
businesses in Cornwall and the Isles of Scilly (Closes June 2016)
• Seedbed - Loans up to £50,000 for social ventures in the SW with fully funded business support
• Fresh Start and Pesca – Small loans for tenant farmers in Cornwall and fishing- related businesses in Devon and Cornwall
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Future OpportunitiesTwo new streams of finance becoming available in 2016:
• National £60m loan fund – providing loans up to £100k in the South West
• Recycled legacy funds – providing loans up to £250K in the South West
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o crowdfunding
Crowdfunding in Cornwall
o crowdfundingCrowdfunded | 2016
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o crowdfunding
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Rewards crowdfunding is best explained by example
1. Phil from Leeds wanted
to start up a bakery
2. He needed £8,000 to
purchase a bread oven
3. The bank wouldn’t lend
4. He created a project
on Crowdfunder
5. And raised over £8,000
from 114 people
Leeds Bread Case Study
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o crowdfunding
How it works . . .
Create your project
on Crowdfunder
Share your idea with
the crowd, they pledge
cash for rewards
Your idea gets
funded!
How it works
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o crowdfunding
Why run a project?It’s so much more than money . . .
Marketing
Validation Funding
Advocates
Benefits
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o crowdfunding
Launch
o crowdfundingProject page
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o crowdfunding
Grow
o crowdfundingProject page
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o crowdfunding
Scale
o crowdfundingProject page
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o crowdfunding
Local business
o crowdfundingProject page
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o crowdfunding
Bonkers projects
o crowdfundingProject page
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o crowdfunding
“Exporting”
o crowdfundingProject page
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o crowdfunding
Social Enterprise
o crowdfundingProject page
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o crowdfunding
Small
o crowdfundingProject page
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o crowdfunding
Big
o crowdfundingProject page
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o crowdfunding
What next
Get a team
together
Create a project
on Crowdfunder
Get your idea
funded!
What next?
Read the funding pack
and make a plan
Tell us about your idea: http://www.crowdfunder.co.uk/your-idea
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Tax the basics and the pitfallsNigel Somers
Tuesday 10th May
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pkf-francisclark.co.uk
.
Income Tax
Allowances
2016/17 2015/16
Personal allowance £11,000 £10,600
Basic rate band £32,000 £31,785
Higher rate threshold £43,000 £42,385
Additional rate threshold £150,000 £150,000
Personal allowance abated by £1 for each £2 of income from £100,000 £100,000
Personal allowance lost at £122,000 £121,200
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pkf-francisclark.co.uk
.
Income Tax
Rates
2016/17 2015/16
Basic rate 20% 20%
Higher rate 40% 40%
Additional rate 45% 45%
Dividend tax rate (BR) 7.5% 0%
Dividend tax rate (HR) 32.5% 25%
Dividend tax rate (AR) 38.1% 30.6%
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pkf-francisclark.co.uk
Income Income TaxGross Income
Personal Allowance:
50,000
(11,000)
-
Taxable 39,000
Tax Payable: @ 20% 32,000 £6,400
@ 40% 7,000 £2,800
£9,200
Mr X
Tax Calculations – 2016/17
Ignores National Insurance Contributions
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pkf-francisclark.co.uk
Income Income TaxGross Income
Personal Allowance:
60,000
(11,000) -
Taxable 39,000
Tax Payable: @ 20% 32,000 £6,400
@ 40% 17,000 £6,800
£13,200
HICBC 1,788.80
Mr X
Tax Calculations – 2016/17
Ignores National Insurance Contributions
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pkf-francisclark.co.uk
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
1,083 1083 1084 1,083 1083 1,084 1,083 1,083 1,084 1,083 1,083 1,084 13,000
216.60 216.60
216.80 216.60 216.60 216.80 216.60 216.60 216.80 216.60 216.60 216.80 2,600
917 917 916 917 917 916 917 917 916 917 917 916 11,000
SALARY - £24,000
Taxable
Annual allowance
Tax due £1,083 @ 20% = £216.60
Tax
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Profit & Loss £Sales 200,000
Less: Cost of Sales (100,000)
Gross Profit 100,000
Less: Admin Expenses 50,000
Net Profit £50,000=======
Mr X
Profit & Loss Account – Year Ended 28 February 20XX
pkf-francisclark.co.uk
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pkf-francisclark.co.uk
Income £ £Self Employment 50,000 Total Income 50,000
Personal Allowance (11,000)
Taxable Income 39,000
Tax Thereon Non-Savings 32,000 @ 20% =
7,000 @ 40% = 39,000
6,400.002,800.00
Income Tax 9,200.00
Total Tax DueAdd: Class 2 National Insurance dueAdd: Class 4 National Insurance due
9,200.00 145.603,284.60
Total Tax & Class 4 NI 12,630.20
Tax Liability 12,630.20
Mr X
Tax Calculations – Year Ended 5 April 2017Note: Calculation is based on rates and allowances at the time of the 2015 Summer Budget
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pkf-francisclark.co.uk
Income £ £Tax Liability 12,630.20
Less: Tax paid on Account 31 January 2017 31 July 2017
Tax Due 12,630.20Due 31 July 2017 31 January 2018
-12,630.2012,630.20
=========
Payments on Accounts for 2017/18 31 January 2017 31 July 2017
6,315.10 6,315.1012,630.20
=========
Summary of Payments due 31 July 2017 31 January 2018 31 July 2018
-18,945.30 6,315.10
Mr X
Tax Calculations – Year Ended 5 April 2017
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pkf-francisclark.co.uk
Income £ £Self Employment 50,000 Total Income 50,000
Personal Allowance (11,200)
Taxable Income 38,800
Tax Thereon Non-Savings 32,400 @ 20% =
6,400 @ 40% = 38,800
6,480.002,560.00
Income Tax 9,040.00
Total Tax DueAdd: Class 2 National Insurance dueAdd: Class 4 National Insurance due
9,040.00 145.603,226.60
Total Tax & Class 4 NI 12,512.20
Tax Liability 12,512.20
Mr X
Tax Calculations – Year Ended 5 April 2018Note: Calculation is based on rates and allowances at the time of the 2015 Summer Budget – some tax allowances may have been ESTIMATED
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pkf-francisclark.co.uk
Income £ £Tax Liability 12,512.20
Less: Tax paid on Account 31 January 2017 31 July 2017
(6,315.10)(6,315.10)
Repayment Due (118.00)Due 31 July 2017 31 January 2018
- -
-=========
Payments on Accounts for 2017/18 31 January 2018 31 July 2018
6,256.10 6,256.1012,512.20
=========
Summary of Payments due 31 July 2017 31 January 2018 31 July 2018
-6,256.106,256.10
Mr X
Tax Calculations – Year Ended 5 April 2017
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VATJulie Towers, Partner VAT ServicesMay 2016
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VAT registration
pkf-francisclark.co.uk
• Taxable income
• Threshold £83,000 from 1 April 2016
• Last 12 months
• Next 30 days
• Exemption if income predominantly zero-rated
• Exception if ‘one-off blip’ and turnover in next 12 months is expected to be below deregistration threshold (£81,000).
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pkf-francisclark.co.uk
.
VAT registration
• Voluntary registration can be requested where it is advantageous to register before the threshold is breached
• Only zero-rated income
• Recovery of VAT on expenditure
• VAT can be recovered on expenditure incurred by the taxpayer before registration
• Services in previous 6 months
• Goods purchased in previous 4 years
• VAT can be recovered on pre-incorporation expenditure in certain circumstances
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pkf-francisclark.co.uk
.
Overseas issues
• Purchase of goods from EC suppliers can trigger liability to register in the UK
• Similar rule for services from any non-UK supplier
• EORI required for import of goods from non-EU country
• Most income from overseas customers counts towards the VAT registration threshold. Exceptions: • Most services provided to businesses in other EC countries• Most services provided to any customer outside the EC
• Additional compliance for trade with EC countries
• Consider VAT if storing goods in other EC countries
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75
Outset Cornwall
Ian Williams
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76
Outset CornwallConsortium of partners:-
- Outset Cornwall- YTKO
- Spark- Truro & Penwith College
- Business Enterprise for Women (BEW) - Truro & Penwith College- The Engine Room
- Cornwall Neighbourhood for Change- Real Ideas Organisation- School for Social Entrepreneurs Cornwall
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77
Outset Cornwall
• European Regional Development Funded Programme
• Covers Cornwall and the Isles of Scilly
• Start their own business or register self-employed
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78
Outset Cornwall• Information Sessions
• Workshops
• One to one coaching
• Networking – Annual Events with speakers
• Outset Online
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79
Outset Cornwall
• Contact us at:-
Outset Cornwall 0800 917 4324 [email protected] www.outsetcornwall.co.uk
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80
Truro & Penwith College
• Spark
• Business Enterprise for Women (BEW)
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- European Regional Development Funded
- Innovative Programme, First Class Support
- Workshops and Events
- One to One Coaching – Personalised Development Plans
- Six-Week Test Trade Period
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Business Enterprise for Women (BEW)
- European Regional Development Funded
- High Quality Business Start-up Support
- Personal Development
- Unlimited Specialist One to One Coaching
- Dedicated Mentoring
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Jon Rolls
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Delivered in partnership by:
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Supporting Cornish SMEs and social enterprises
That are:• Pre-start• Start up• Less than 12 months trading
Offering:• A minimum of 12 hours specialist support across a range of activities
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Engine Room support includes
• Information Sessions• Business Development Programme• Group Workshops• Open Events• A comprehensive website and online listings• 1:1 coaching and support• Networking opportunities• Conferences and events
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Eligibility criteria:
• Participants must be resident in Cornwall for the duration of the programme
• Businesses must be based/registered/will be registered in Cornwall
• Proposed business must be eligible for funding
• Must be a new businesses – not trading for more than 12 months
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Further information www.theengineroom.org.uk
• Cornwall Neighbourhood for Change: 0800 328 4065 [email protected]
• Real Ideas Organisation: 08458 621288 [email protected]
• SSE Cornwall: 01726 216105 [email protected]
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pkf-francisclark.co.uk
BreakSession 3 start time
11.40am
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(c) copyright PKF Francis Clark, 2016
You shall not copy, make available, retransmit, reproduce, sell, disseminate, separate, licence, distribute, store electronically, publish, broadcast or otherwise circulate either within your business or for public or commercial purposes any of (or any part of) these materials and / or any services provided by PKF Francis Clark in any format whatsoever unless you have obtained prior written consent from PKF Francis Clark to do so and entered into a licence.To the maximum extent permitted by applicable law PKF Francis Clark excludes all representations, warranties and conditions (including, without limitation, the conditions implied by law) in respect of these materials and /or any services provided by PKF Francis Clark. These materials and /or any services provided by PKF Francis Clark are designed solely for the benefit of delegates of PKF Francis Clark. The content of these materials and / or any services provided by PKF Francis Clark does not constitute advice and whilst PKF Francis Clark endeavours to ensure that the materials and / or any services provided by PKF Francis Clark are correct, we do not warrant the completeness or accuracy of the materials and /or any services provided by PKF Francis Clark; nor do we commit to ensuring that these materials and / or any services provided by PKF Francis Clark are up-to-date or error or omission-free. Where indicated, these materials are subject to Crown copyright protection. Re-use of any such Crown copyright-protected material is subject to current law and related regulations on the re-use of Crown copyright extracts in England and Wales.These materials and / or any services provided by PKF Francis Clark are subject to our terms and conditions of business as amended from time to time, a copy of which is available on request.Our liability is limited and to the maximum extent permitted under applicable law PKF Francis Clark will not be liable for any direct, indirect or consequential loss or damage arising in connection with these materials and / or any services provided by PKF Francis Clark, whether arising in tort, contract, or otherwise, including, without limitation, any loss of profit, contracts, business, goodwill, data, income or revenue. Please note however, that our liability for fraud, for death or personal injury caused by our negligence, or for any other liability is not excluded or limited.
PKF Francis Clark is a trading name of Francis Clark LLP. Francis Clark LLP is a limited liability partnership, registered in England and Wales with registered number OC349116. The registered office is Sigma House, Oak View Close, Edginswell Park, Torquay TQ2 7FF where a list of members is available for inspection and at www.pkf-francisclark.co.uk. The term ‘Partner’ is used to refer to a member of Francis Clark LLP or to an employee. Registered to carry on audit work in the UK and Ireland, regulated for a range of investment business activities and licensed to carry out reserved legal activity of non-contentious probate in England and Wales by the Institute of Chartered Accountants in England and Wales. Partners acting as insolvency practitioners are licensed in the UK by the Institute of Chartered Accountants in England and Wales. A partner appointed as Administrator or Administrative Receiver acts only as agent of the insolvent entity and without personal liability. Francis Clark LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.
Disclaimer & copyright
pkf-francisclark.co.uk