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Welcome to Fresh Threads, our weekly roundup of the best comments and advice from the forums.
Here are my top picks from this week:
munya, General Business
For casual restaurants, how many days of slow business (for example, 20% fewer sales than the previous week) would the owner experience before they started to feel uneasy?
If munya were to throw out 30% off discounts after experiencing three days of slow business, would that be a sensible move or a knee-jerk reaction?
Chris Ashdown: Reduced customer numbers can mean two major things. Either the market is saturated, so the total number of customers available that day are spread thinly over the number of potential restaurants in the area, or you’re not attracting customers because the food, service, atmosphere or price is lacking. I’d start by looking at what percentage of your customers are regulars. Remember, people don’t tend to complain at restaurants when asked if everything is fine – they just promise themselves never to come back.
Mark T Jones: It’s all about consistency. Even consistent mediocrity can be successful. So look inwards – has anything changed to affect the consistency of your offering? Are there sullen staff or have you changed the chef? And looking outwards, has anything changed to affect footfall? I’m wondering if late November might be a “calm before the storm” period when people get ready for Christmas.
Tony84: Have you had a look on Trip Advisor? Are there any reviews on there that you can take as feedback? If people are saying “good food but expensive” or even “bad food and expensive” then you have your answer.
Etanku, General Business
Etanku is interested in purchasing a business that’s not been registered with Companies House. The business is a YouTube channel, and it comes with several other social accounts.
The problem is, the owner has trademarked the name but hasn’t registered the business. Etanku wants to buy 50% of it – for the value of, let’s say, £50,000 – so what’s the best way to proceed? Ultimately, Etanku wants to end up in a limited company with the current owner, and the company would own the YouTube channel and social accounts.
Alan: I would suggest:
A few other points to note:
Pish_Pash: The other guy is instantly going to be on the hook for Capital Gains Tax on the sale of his shares. Bearing in mind he's done nothing else legal to date, I can't imagine he'll be overly enamoured at that prospect!
Clinton: People who haven't bought businesses before should get some expert help at the earliest possible stage on their way to buying a business or the assets of a business! We see numerous examples in these forums of how such deals went sour when the investor didn't take advice. For starters, you don't know how to do DD on the individual (intangible) assets which form the core of the value here.
Then, your statement about 50% suggests there's tons of stuff you don't know, and really need to know, about limited companies, directorships and shareholder agreements. But most of all, it looks like you're just assuming all those social media accounts can be transferred, legally and securely, to the ownership of a limited company. I suggest you read each one's terms and conditions, because most don't allow transfer of accounts.
Downhill racer, Legal
Downhill racer works for a small construction company. Several years ago, they employed the services of a sub-contractor, who didn’t have any other clients at the time. He worked for two to three years, left the business and then eventually came back as an employee.
The sub-contractor recently told downhill racer that HMRC are requesting the payment of a large tax bill, as he claimed for items through his accounts that he shouldn’t have claimed for. Would downhill racer’s company be brought into this investigation in any way?
Newchodge: If your company employed him – but allowed him to be called a sub-contractor – then yes, you can be caught up in the HMRC investigation. It is the employer's responsibility to ensure that correct tax and NI deductions are made from all those who work for them. If you were aware that he was probably not self employed, as this comment suggests, it was your responsibility to make sure and your responsibility to make the appropriate deductions.
Adam93: On the balance of probabilities, it is the subcontractor's fault for claiming unjustifiable expenses. Any unpaid tax is therefore the subcontractors responsibility. From experience, to get investigated nowadays you have to do something that sticks out on your tax return, such as having sales of £40,000 and expenses of £30,000 and claiming a significant CIS refund – this is probably what has happened in my opinion.
unstoppable, Sales, Marketing & PR
Unstoppable has a product they sell to both wholesale and retail customers. The product is currently unbranded and in generic packaging.
If they brand the packaging, is it better to use one brand for both products or a different brand name for wholesale and retail? They’re investing a lot of time and money into the packaging, so unstoppable is keen to get opinions first.
BigPhill: It depends on where you see the brand. Are you aiming for the high end or low end of the market? Think of it this way: if you use one brand name and sell to both wholesale and retail, you obviously run the risk of your brand being devalued. For example, if you sell on your website to retail customers at £100 per product, but sell at wholesale for £50 per product, your wholesale customers could theoretically sell the item at whatever price they want.
Let’s say they sold the product for £75 each. That’s cheaper than you, but they’re still making money on the £50 wholesale price. If your goal is to generate brand awareness by getting your name and product out there, using one brand and selling to both markets could benefit you. It really depends on what you’re aiming for.MY OFFICE IN CHINA: If the product is ultimately aimed at the consumer being the end user, then use one branding and packaging. If, however, you are supplying the trade with a product they will be using themselves – who are not selling to the end user – then use different packaging, but keep the brand the same. Use the term 'TRADE' on the packaging. It may all depend on the product and type of business you are in.
That's all for this week – have a lovely weekend!
Thank You for sharing this stuff!
After all said and done, not all businesses or websites need to worry about it. Most small businesses will not be affected right?