Tuesday 7 August 2007

New Requirements for Driving Impacts All Businesses!

A new Government initiative designed to impact businesses employing 5 employees and over could still affect those with less than 5 staff. The requirements cover both employees driving company vehicles but also employees driving their own cars during work related activities even on a limited basis.


Although the new Department for Transport (DfT). ‘Driving for Work’ initiative was drafted to cover enterprises with 5 and over employees most businesses are unaware that the overarching duty of care for employees under Health and Safety at Work Act 1974 would mean that these requirements result in the need for businesses of all sizes to comply with most of the procedures. There is also a duty of care to others who may be affected by their business activities, which, in the case of driving, means all other road users. Therefore all enterprises should have a 'driving for work' policy then manage their risks accordingly.

Read the notes below and speak to us today to find out how we can help you to comply at minimal cost, for more information Click here


Still Not Convinced it’s Important That You to Act Today?

Here are some frightening statistics!

  • There are an estimated 3 million company cars on the roads and roughly 1 in 3 will be involved in an accident each year.²
  • Company drivers who drive more than 80% of their annual mileage on work related journeys have more than 50% more injury accidents than similar drivers who do no work related mileage.²
  • Business drivers have collision rates that are 30 – 40% higher than those of private drivers.
  • Every week around 200 road deaths and serious injuries involves someone at work.
    About 300 people are killed each year as a result of drivers falling asleep at the wheel.
  • About 4 in 10 tiredness-related crashes involve someone driving a commercial vehicle.²
  • Work-related road accidents are the biggest cause of work-related accidental death. Between 800 and 1000 people are killed annually in work-related road traffic accidents compared to approximately 250 fatalities due to accidents notified annually under the Reporting of Injuries Diseases and Dangerous Occurrences Regulations (RIDDOR).

    1 National Travel Survey
    2 DFT Road Research Report No. 51

So what is the business case for this initiative?

Work-related road accidents have more hidden costs many employers realise. The cost is much more than the garage bill for the damaged vehicle and in many cases less might be covered by insurance than can be assumed. It has been estimated that the full cost to the employer might be £8 to £36 for every pound paid on an insurance claim. Some items cannot be covered by insurance.


The following is a list of items business may find they have to cover themselves:

  • Loss of company reputation and contracts
  • Fines and costs of prosecution
  • Damage to products/ plant/ building and equipment
  • Staff down time for medical appointments/attendance at court etc
  • Replacement staff costs and sick pay
  • Loss of production or production delays
  • Increased insurance premiums and excess
  • Excess on a claim
  • Offenders’ own legal fees
  • Claims from third parties
  • Accident investigation and paperwork
  • Repairs to damaged equipment
  • Alternative transport for repair duration
  • Inconvenience
  • Re-delivery
  • Management and administrative time.

Of course it’s best not to have a crash in the first place - and it’s been proven that some simple measures any firm can take will make one much less likely.

The Benefits to the Employer
The benefits of implementing and managing a driving for work policy include:

  • Reduced accident losses
  • Defence against criminal prosecutions and civil litigation
  • Lower insurance premiums
  • Lower transport costs
  • Improved business performance
  • More effective vehicle use
  • Less down time
  • Improved safety culture
  • Improved public image
  • Higher staff morale


What do you need to do?

The basic system for managing ‘driving for work’ comprises the following elements:

  • Draw up an overall policy statement
  • carry out risk assessments
  • minimise risk through control measures
  • implement rules and procedures
  • manage data recording
  • audit, communication and review

Friday 3 August 2007

Angels Rush in Where Banks Fear to Tread


A Guide to Business Angels and Venture Capital investment

Business Angels can offer investment, particularly in the early or growth stages of development, in return for equity.
Of course because of the risk to their funds, investors expect a higher potential return than for safer, more secure investments.

Equity Finance is often a suitable option where:
• the nature of a business or project deters other debt providers, e.g. banks
• the business does not have enough cash to pay loan interest because it is needed for business activities or funding growth.

The questions business owners should ask themselves include:

• Are they prepared to give up a share in their business and some control?
Investors expect to monitor progress and most will want involvement in significant decisions.
• Are the owners and their key people confident in the business 'product/service?
· Does the product or service have a unique selling point that singles it out?
• Do they have the drive to grow the business?
• What industry experience and knowledge does the management team have? Is there a variety of skills required to grow the business?

After considering the above, owners should seek advice from a professional adviser.

So what are Business Angels?

Business Angels (‘BA’s’) are independently wealthy individuals who invest in high-growth business in return for a significant equity share in the business. Some ‘BA’s’ invest on their own, others do so as part of a network, syndicate or investment club. In addition to money, ‘BA’s’ often make their own skills, experience and contacts available to the company.

‘BA’s’ will typically invest in businesses with:

• an investment requirement of between £10,000 and £250,000, (most initial investments are less than £75,000).
• who have the potential for generating a high return for the Angel – unlike other sources of finance ‘BA’s’ are not averse to high risk scenarios
• good early stage development or expansion
• a presence in a particular sector.

If a business successfully attracts a business angel investment, they're likely to find it easier to secure further funding from other sources.

The advantage of using a business angel is that they often make an investment decision quickly, without complex assessments.
However, owners will still need a professional and tailored business plan.
Most business angels can bring valuable first-hand experience of either working in a small business or running their own business venture. They're also likely to have local knowledge, as they tend to focus their investments within a small geographical area.

Some ‘BA’s’ may be eligible to have their investment funds matched by the UK
Government under its Enterprise Capital Funds (ECF’s) scheme.
ECF’s are commercial funds, investing a combination of private and public money against a share of equity in small high-growth businesses seeking up to £2 million of equity finance.

There are of course disadvantages, business angels don't make investments very regularly and may not be actively looking for an opportunity, so they may be difficult to find. While you may decide to approach use an adviser to help you with this link up, business angels will place a lot of emphasis on the chemistry with the owner and how well they can work together directly with the owner and the management team. Tracking down the right investor may take longer than expected and can typically take several months but business owners can short cut this by working with an experienced consultant.
A consultant experienced in working with Business Angels and Venture Capitalists will guide a business owner through the minefield and help to get a business investment ready, helping to prepare an tailored business plan and to prepare the business owners for a presentation or ‘elevator pitch.’ The current TV series ‘The Dragons Den’ gives a flavour of the presentation process but of course it not entirely accurate as the ‘Dragons’ don’t get the business plan and a lot of dramatic licence is used.

The Exit
Usually at an agreed point in the future the BA will want to sell their shares and realise a significant return on their investment, when this happens in many cases the owners will want to buy out the ‘BA’s’ shareholding. Of course in a significant proportion of cases they don’t have enough money to do this. In this scenario the ‘BA’ will sell and the owner will be forced to agree or sell their share to the same buyer (this is known as the ‘drag along’ clause and is contained in the investor agreement which is set up at the beginning.
Alternatively If you the owners want to exit the business and sell their shares to a third party obviously the ‘BA’ would have to agree and would expect to also sell their share holding to the same buyer again this is included in the investor agreement (known as a ‘tag along’ clause.

Costs
This varies vastly dependent on the investment groups that are approached also there are seem to be some unscrupulous consultants charging extortionate fees to help prepare business plans and get owners investor ready.

Click here to contact us for more information and hear how we can help owners become investor ready and link owners directly to BA’s at low cost

Venture Capital
Venture Capital is also known as private equity finance. Unlike Business Angels, venture capitalists (VC’s) look to invest very large sums of money in return for some of a business' shares.

VC’s typically invest in businesses with:
• a minimum investment requirement of around £2 million, though many smaller regional VC organisations may invest from £50,000.
• an ambitious but realistic business plan.
• a product or service that provides a unique selling point or other competitive advantage
• a large earning potential and offering a high return on investment within a specific time frame, e.g. five years
• sound management expertise – unlike Business Angels, VC’s tend not to get involved in the day-to-day running of the business, although they may help with a business' strategy.
• a proven track record - for this reason start-ups are generally not considered by VC’s for investment

The advantages of securing a VC are that they can provide large sums of equity finance and bring a wealth of strategic expertise to a business. Again, like the business angel investment if a business successfully attracts a VC, they're likely to find it easier to secure further funding from other sources.

The disadvantage is that securing a deal with a VC can be a long, expensive and complex procedure. Businesses are required to draw up a very detailed business plan, including financial projections for which businesses are likely to need professional help.
Also, if owners get through to the deal negotiation stage, they will have to pay significant legal, accounting and other fees whether or not are successful in securing funds.

The Exit
At the exit point, (agreed at the beginning) normally the business is sold as a whole even if the owners don’t want to. So this needs to be kept in mind, (the only other options may be through a management buy out, (MBO) and refinancing which would normally involve refinancing the business.

Click here to contact us for more information and hear how we can help owners become VC ready and link owners directly to Venture Capitalists at low cost

Add to Google Reader or Homepage