A panel of experts on small business answer questions from BBC News Online readers.
Whether you are worried about growing your company without losing control, or agonising over funding for a new business, our panellists can help you.
Following a strong response, BBC News Online is publishing several sets of answers to your questions. We have tried to include as many questions as possible.
BBC News Online will publish the next set of answers from our panel of small business experts on Tuesday, 7, October.
Patrick Bailey Philpott, Essex
I am 13 years old and have formed my own business, SR & C Limited. I am considering starting my own marketing-oriented website in the near future but I don't know where to start and, being 13, I don't know how to write a well-structured business plan. I just don't know what to do next and I really need some expert advice. What shall I do?
Anita Roddick, founder of The Body Shop
So what is your business? The title doesn't give anything away. Well at this moment in time you are definitely going about it the wrong way. You want to start a business but you don't know what (why should you at your age?). You think it might be market-oriented but only thinking.
I would really encourage you to spend the next couple of years shaping and defining the product or the service. Learn from everyone, ask questions, irritate by curiosity. Decide what your passion is and go from there.
Forget business plans, or marketing plans or any other plans. They mean diddly-squat. The idea is king. Nothing else matters. You can buy business plans off the shelf!
But you have to find out for yourself what and how your idea separates you from anyone else in the field you want to work in. Also (and this is a really good piece of advice) don't think business, think livelihood!
Khalid Muhmood, Vietnam
My wife and I have built a successful education and training business in Vietnam which we would like to develop regionally.
I would appreciate your advice on what you feel was the most important factor in your success in expanding the Body Shop worldwide?
Anita Roddick, founder of The Body Shop
Having the product right and making sure everyone knew about it. Shout it from the rooftops. Communication of what the product is, is of primary importance.
If you want to expand, try franchising - by that I mean in its simplest definition you have the ownership of the product, you train others in your methods and they, the franchisee, invest in the overhead costs. For me it was the only path to expansion as I had no money.
Neil Darbar, England
My wife runs a mobile catering business where we serve whole-day breakfasts in an industrial site and is doing very well. Though I say it myself, she is a brilliant cook and has several recipes of Indian foods which are unheard of in the UK - and we all know how much the British public love Indian foods.
We often cater at local events, specialising in Indian foods and make a sauce which is so popular that we have been asked time and time again about the possibility of buying it in the shops. Could you please guide us on how to go about it as we think it would be an instant success if marketed correctly.
Simon Edwards, marketing director at Cobra Beer
At Cobra, we certainly know how much the British public loves Indian food! The short answer to your question is that it depends on what sort of production facilities you currently have. If you can only produce enough sauce for small numbers of people then start off locally.
The best way would be to invest in some bespoke packaging, which could be as simple as sticky labels designed by yourselves (printed on your home computer) and stuck to plain containers.
If there is an interesting story behind the sauce, e.g. its history/origin, include it on the label. Then sell your sauce as an extra item on the mobile unit.
Do some investigating and find some recipes that would complement your sauces. Print those on nicely designed paper and give them out with the pots.
Don't forget to try different styles of sauce too. Experiment on your regular customers and see if you can build up a small range of sauces. When you try out new sauces, keep an eye on how that affects the sales of the original sauce - if you have two sauces but only the same sales, it might be more cost-effective just to stick with the one sauce.
Try bringing in seasonal sauces (effectively limited editions, that could tie in with events in the calendar e.g. Chinese New Year). By constantly innovating you will keep the public's interest and you'll start to build up a reputation as sauce experts!
As soon as you are building up regular orders (even if it's just one sauce), take your success to the local newspapers and try to get them to write a feature on you. You could offer a free delivery of the sauce to a number of their readers as an extra incentive to write an article.
Armed with a great product, great sales and PR coverage, start targeting the local deli or takeaways in the area your mobile unit operates (to capitalise on the awareness you have created). Provide the shops with the facilities to do tastings of the sauces i.e. ask them to put a tray of opened pots on the counter with bread sticks for customers try the product.
At this point, you might need to take your sauce and your story to your bank manger and invest in bigger production facilities and start expanding. But make sure that you have the facilities to always meet demand - unreliable suppliers really annoy retailers.
As you grow, invest in the brand too, by improving the packaging, innovating, and getting PR, to boost your reputation and awareness.
Robin Lewis, UK
I'd like to leave my existing job and join my former boss who has set up a new company in a related industry.
He's indicated that he'll be happy to match my current salary but also work in some plan around taking a share of the business - but to pay out over two to three years. What are the options around structuring this arrangement - share options, handing over a chunk of the business, partnership etc.?
David Wilkinson, partner, Ernst & Young
All of these are options that you could follow, but they all have significant tax consequences, and you/your colleague should take professional advice.
Further alternatives include buying shares at market value if the business has a current low value, but high expectations of future value growth and a "phantom option", which would give you some of the benefits of a share of the business, but paid as a bonus on disposal.
Share options - The EMI scheme, which is designed to assist growing companies incentivise their staff, may be something to consider. This is a share option scheme that allows for the granting of options over shares with a market value of up to £100,000 at grant.
Any increase in value of the shares is potentially income tax-free, with the gain falling within the capital gains tax (CGT) regime, allowing you to take advantage of the taper relief and annual exemption.
There are strict criteria that need to be met by both the company and the option-holder before EMI options can be granted, including the type of business, the size of the company and whether it trades wholly or mainly in the UK.
Alternatively, there is the Inland Revenue Approved Share Option scheme, which allows for the granting of options over shares worth £30,000 potentially income tax-free (with any gain once again potentially subject to CGT instead).
"Unapproved options" are extremely flexible as there is no limit to the value of options that may be granted, but they do not benefit from the income tax-relief of EMI or Approved share option schemes, which can make them very tax-inefficient. It is possible that PAYE and NIC will apply to any gain made in respect of the exercise of these share options.
- Handing over a chunk of the business - there have recently been sweeping changes to the taxation of individuals who receive shares by way of their office or employment.
As a result, unless the terms of the shares are
considered carefully, any increase in value of those shares could be caught by income tax rather than capital gains tax. PAYE and NIC would therefore apply at a point where you would have no realisation to cover the tax payable.
- Partnership - in a partnership scenario, the tax treatment effectively looks through the entity to the individuals concerned.
LLP status could be used to limit personal liability, although this remains an exposure. You and your colleague may also find that customers and suppliers who are not used to this form of structure are less comfortable doing business with you. There are also implications when you want to sell the business.
- Buy shares - the simplest and probably the most tax effective route, but it requires you to buy shares from your former boss now. You might be able to come to some deferred payment approach with him, but any reduction below market interest rates on the borrowing would probably be taxable.
- Phantom option - this is effectively a bonus payable on performance over time or at an event (such as a sale), calculated using some predetermined formula, on the notional value that you would have received had you had a share of the business. It is taxed as a straight bonus (PAYE and NIC) and is therefore not particularly tax-efficient.
Mac Hippolyte, England
I have a number of new business ideas floating around my head, and would like to know if there is a company or an individual that I could contact in order to run the ideas by them, before I begin to put together a full business plan. I have spoken to friends and relatives, but their response may be a little biased, as you can imagine.
Judith Rutherford, head of Business Link for London
Without wishing to sound too self-promotional, that's exactly what the Business Link network is for!
The primary aim of the organisation is to help small businesses and entrepreneurs survive and prosper through giving them access to impartial and targeted advice.
One of our core offers is business mentoring, where Business Advisers act as precisely what you're looking for - a trusted sounding board and coach. I suggest you contact your local Business Link: 0845 600 9 006.
Rajindher Singh, UK
How would I find out about which grants are available and how I could apply for them? Are they specific to the industry the company will be based in, e.g. grants for IT equipment? Are there any courses available, for free, to help learn about accounting etc?
Judith Rutherford, head of Business Link for London
There are a huge variety of grants available to UK businesses and entrepreneurs, stemming from multiple sources: predominantly central government, local government and the European Union.
In essence a grant is financial assistance, usually for a specific project, given to a business by an awarding body. It provides funding to allow a business to undertake a specific project that, without such financial assistance, would not be able to proceed.
A grant is usually a one-off payment and will provide funding that covers a percentage of the costs of a specific project.
As a rule of thumb, most grants are based on the concept of matched funding, with the awarding body meeting up to 50% of the costs of a project and the business meeting the remainder of the costs. Grants cannot usually be used as working capital.
Grants are available for a variety of projects, but each individual scheme will offer funding for a specific purpose. If you're looking to find out what grant funding is available in your area, one of the best places to start is your local Business Link.
Most will have a directory of assistance available locally, nationally and at a European level.
In addition www.j4b.co.uk is a useful source of information, offering a free facility for businesses to search for grants that match their profile.
With regard to your query about free training, I would advise you to contact your local Learning and Skills Council, which should be able to provide you with further information. Learn Direct (www.learndirect.co.uk) may also be able to provide relevant distance learning courses.
Aaditya Tangri, Canada
How old should I be to be able to apply for a loan from the bank? And what percentage of loans are provided for first-time business owners, say if I wanted to start a bar?
Peter Ibbetson, head of NatWest Business Banking
Generally in the UK, the age at which you can apply for finance is 18, however, this differs between institutions and depends on the type of finance.
This may be different in Canada and therefore you should approach one of your local banks for advice on their guidelines.
You do not mention how old you are, if you do wish to open a bar it is worth considering that the licensing laws in the UK state that a person must be 21 to hold a license to sell alcohol and therefore this would be likely to affect an application for finance to run a bar - again you should check the licensing laws for you own local region.
Nick Rogers, England
I am thinking of setting up my own business and would like to know, in your experience, what are the main reasons for small business failures? And what are the key issues that most small business do not identify until it is too late?
Peter Ibbetson, head of NatWest Business Banking
The key to any successful business is planning for every eventuality. Doing this should make you aware of any potential pitfalls for your business before they occur.
There are, however, some factors that can affect the likely success of a business. At NatWest we undertook a piece of research to better understand these factors. We found that the age of the business owner seems to affect the survival of a business more than any other factor, the greatest longevity was seen in those businesses with proprietors aged 45-60.
Other factors influencing success include the number of partners/proprietors in the business and having qualifications in the line of trade of the business.
There are a number of reasons why these elements have an effect - for example, younger people may find that they wish to return to salaried employment and this option is more available to them than to older entrepreneurs.
The greater the number of proprietors the more people there are to share your vision and some of the hard times that you may face. Overall, of the businesses that we surveyed, only 27% of closures were as a result of financial difficulties, the others all closed through choice.
It should be remembered that each business is individual and the determination and commitment of the business owners can have just as much effect as any other factor on the success of the business.
If you are concerned about the viability of your proposition or feel you are lacking any of the skills necessary to make your business a success, look at using a business mentor or business advisor to guide you through the process.
Tony Thomson, UK
Besides offering flexible working hours, how do you believe that a small business employing less than 10 people can motivate its employees at minimal cost?
Professor Nigel Nicholson, London Business School
The short answer is teamwork. Hire people who want to be part of small dynamic business, set clear goals, and use high involvement methods to get them to help you find the most flexible, efficient and creative means for achieving goals and solving problems.
Having a sense of ownership and responsibility, where success is celebrated and shared, is tremendously motivating.
The downside is instability through change. So remember to make sure that you have best-practice routines for meeting, communicating and making decisions, to avoid things becoming anarchic and unstable. Let conflicts emerge and be dealt with about tasks, goals and processes, but keep a strict embargo on personal conflicts - these need to be taken and dealt with outside just between the concerned parties.
Have fun, and good luck!
Robert Stannard, UK
I am working in Germany at present, but my father, 73, is still running the family business he started 23 years ago. It's a distribution business, selling aluminium profiles for the Double Glazing Trade. He employs about four to five people.
The question that is very much on my mind at the moment, is should I try to return home from Germany to take over the business? The reason I haven't involved myself in the business up to now is that my father is a very strong character, who has always wielded a very tight control over the business, so I have never felt confident to work in the business.
Turnover is more than £1m pounds a year. It used to be more but there are some issues to face, such as an aggressive local competitor and also a shift in direction in the industry.
We have discussed options, such as trying to find a buyer for the business, though we don't know where to turn for that and how do you value a business? Also we thought about employing someone to run it, but my father has always been reluctant, saying the company can't afford to employ a manager.
It's true as an owner you must have a completely different attitude to the business as an employee, but my view has always been if the manager is incentivised enough then that should be a good enough spur.
Can you advise on what could/should be done? Is there a mechanism where we could seek some advice? Should I return to UK to take over the business? I just feel I would regret it if we didn't have the business anymore, and yet I don't know if I could manage it.
Professor Nigel Nicholson, London Business School
You face an interesting and important decision. At one level it is a matter for you to search your heart on. It will be a major turning point for you, and you have to decide if you're up for it. I can say, though, that many others have trodden the same path, and for some of those it has proved to be an important new beginning.
It sounds as if you feel a strong pull. In which case go with it in the spirit of undertaking a voyage of discovery, including about yourself.
The second level, is that it is to do with you and your dad. I guess it could please him greatly for you to become involved, which could be a significant lever for you to persuade him of the need to let go so you can play your part without forever feeling him looking over your shoulder.
For the founder-owner letting go is often the toughest transition for someone for whom the business is in their blood and bones. It will be important for you to construct an active helping role for dad, or some new project that will really absorb him. It is probably no alternative for him to retire to the golf course, unless that is what he really wants.
One of the changes that may be due is, as you have foreseen, the appointment of a professional manager. This need not be a problem - for if you get the right person it should pay for itself as an investment.
You will need to follow the many family businesses for whom embracing non-family executives into the extended family of the firm is a critical success factor.
You mention some uncertainty about the value of the business and your financial options. You should seek specialist advice on this, and there are a number of excellent specialist advisory firms in this area. Look up the Family Firm Institute on the web - they are an association of advisors who can find you someone or some agency offering services at a location and price to suit you.
However, the question sell or run, is not just a financial call. You have to factor in the spirit that you will bring to the business as it will become, rather than just calculating its value as it stands at present.
Lee Dunstan, UK
I currently have an empty property (my former residence) which I am now looking to let. As any further income I will receive on top of my full-time salary will fall into the higher tax bracket, I am considering setting up a limited liability property company to let out this property, and hopefully others with the proceeds. Is there anything particular that I should consider from a tax or legal point of view in this circumstance?
David Ladds, law lecturer, King's College London
Property investment companies have become quite popular in recent years as people look to cash in on the corporation-tax starting rate which allows a company to make a profit of up to £10,000 p.a. without paying any corporation tax.
While this certainly looks more attractive than paying 40% as a higher rate taxpayer, it is only one of the factors you need to bear in mind before transferring the property to a company.
What may be very efficient in terms of income tax may be detrimental in terms of other taxes - notably capital gains tax and stamp duty.
If you are planning to build up a property portfolio then the fact that you are paying less tax on your rental income should allow you to build this up quicker, thus increasing your rental yield in the long term.
However, you should be aware that there are likely to be further tax consequences when you extract any profits from the company.
You should also consider the capital gains tax consequences when the property is eventually sold - companies will pay corporation tax on both their income and capital gains at rates ranging from 0% to 32.75%.
Individuals will pay up to 40% on any capital gains but seeing as the property you mention is your former residence you may be able to benefit from Principle Private Residence Relief, which exempts any capital gains made on the disposal of your home.
Even after you move out of your house you are given a three-year period in which to sell your home before you lose the relief.
Additionally, you may be able to claim an extra allowance of up to £40,000, providing the property is let as a 'dwelling house'.
All in all it may be possible to rent out your property for five or six years after moving out before any gain becomes susceptible to capital gains tax.
Given the sums of money involved, you should probably take professional advice on the various income, corporation and capital taxation issues.
You should also be aware that there may be stamp duty complications and there are costs in running a company.
The opinions expressed above are those of the panel of experts, not the BBC's. The advice is not intended to be definitive and should be used for guidance only. Always seek professional advice for your own particular situation.