Watch – 3 flourishing businesses flying the flag for Wales

Investors lending through Funding Circle have an incredible impact on businesses throughout the UK. To celebrate St David’s Day, we travelled down the M4 to meet with three welsh business owners that have been able to go further thanks to your help. 

Over 2,200 businesses in Wales have borrowed over £146 million through Funding Circle so far. One such business is Uniform2Go, a school uniform suppliers in Bridgend. The business’s founder Emma Reese took a loan so they could increase their offering “The funding helped us to buy in a lot more stock, so we could supply at least 15 more schools.”  

Welsh businesses

Kristian Bailey has also seen his business go from strength to strength since taking funding. He heads up Computers For Flooring, a software company that provides a complete management solution for flooring companies. “Since I’ve been involved with Funding Circle, we’ve doubled our net profits year on year for the last four years.”

Darren Evans, who runs a karting business in Newport called Gwent Karting, also says it’s fantastic to be part of the business community in Wales and contributing something back. “There’s a self-belief among Welsh businesses now that wasn’t there 20 years ago, and that does give me an tremendous sense of pride.”

Watch our video to find out more about their stories and how your lending has helped them go further.

How do women invest their money? – Jasmine Birtles

Jasmine Birtles is a TV and newspaper journalist and personal finance expert. In her new column she’ll be helping you get the most from your investment and reach your personal goals.  

More women than ever are earning their own money and managing it for themselves. However, far fewer women than men actually invest it for their futures.

This is more of a problem than it seems on the surface. Arguably women need more money than men in their golden years because women live longer and generally earn less while they are working.

A report by Fidelity last year showed that women could close the pension gender gap if they just invested an extra £35 a month (about 1 per cent of their average salary) and invested it in proper long-term investments.

But frustratingly, women favour what they see as the ‘safe’ option of cash investments (i.e. savings) for their investments. More than two thirds of women who took part in the Fidelity study admitted that they put their savings in a cash ISA rather than an equities one.

Long-term, cash investments (bank and building society accounts) don’t keep up with inflation. So this so-called ‘safe’ option actually loses you money in real terms!

So what should women really do with the money they want to invest?

Take more risks

Women need to reverse the trend of investing in cash for the long-term and put money into what seem to be riskier investment products. Over the long-term, stocks and shares (equities) products do much better than savings accounts. For example, according to the Prudential, the average annual return on UK investments between 1989 and 2014, adjusted for inflation, is 5.2% for equities, 4.6% for bonds and -0.8% for cash. If you keep your money in a decent stock market product, like an index-tracking fund for example, for at least five years, the ups and downs of the stock market get smoothed out and the average return is positive.

Alternatively, you can put your money in a Funding Circle ISA, offering projected tax-free returns of 5.5 – 6.5% per year*. The Funding Circle ISA is simple to set up and typically offers more stability than playing the stock market.

Trust your own ability more

Over and again studies show that, when women and men have equal knowledge of investing, women tend to do better because they trade less and take more of a long-term view. For example, analysis of 2,800 Barclays Smart Investor customers by Warwick University last year found that not only did the female investors outperform the FTSE 100 over a three year period but they also outshone their male counterparts.

Take charge of your own finances

There is still a lingering belief, even among young women, that a nice man will come along and sort out their financial issues. In fact it’s more likely that said man will be looking to the woman to sort out his financial issues!

Spouses need to be more open with each other about their financial situations. For a start, they need to know that their partner has ticked the box on their pension form that enables them to benefit from their pension if the partner dies first. Many older women have been left in poverty when their husband died, effectively taking their pension with them.

Think of yourselves more

Yes, I said it – women need to be more selfish. Or rather, they need to consider their independence more, particularly if they have children. On the whole, and quite rightly, mothers tend to spend their money on the family as they are growing up (and even once they have grown up). This makes perfect sense, except that if they don’t put money away for themselves it’s likely that they will be a financial burden on those children when they come to retire. Taking their own financial future seriously will avoid poverty for them and problems for their children.

Embrace technology

Many young women are doing this already, but men are still making the most of new banking technology more than women. New banking apps like Monzo, Starling and Revolut enable you to round-up spending and put small amounts into a virtual ‘coin jar’ to create savings for yourself. So if you buy a coffee for £2.50 they will add an extra 50p to your savings pot (or ‘Goals’ as it is called in the Starling app). The Moneybox app does this too but puts the extra cash into long-term investments, mainly index-tracking funds, so that your money grows properly and will help you have a richer retirement.

To make your money work harder, you can earn a projected 5.5-6.5% per year* tax-free with the Funding Circle ISA.

By lending to businesses your capital is at risk and your return may be higher or lower. The tax-free entitlement of an ISA depends on your individual circumstances and may change. Not covered by the Financial Services Compensation Scheme.

The views expressed here belong to the author and do not represent those of Funding Circle. Funding Circle is not authorised to, and does not, provide investment, tax, legal or regulatory advice.

The information and views contained here are provided solely for informational purposes and should not be construed as legal, tax, regulatory, accounting or investment advice, or as a recommendation or an offer or invitation by Funding Circle.

To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, such information contained here.

If you have any questions, please speak to your professional adviser or seek independent specialist advice.

*The projected return is an estimate of the annual return, after fees and bad debts, that a diversified investor could earn by lending through the Balanced lending option as of 31 Jan 2019. You can see how the return is calculated here. Your actual return may be higher or lower and your capital is at risk.

Case study: From pro-athlete to business owner – Christine is ‘made to do more’

Growing up an hour from the South Coast, Christine Johnston excelled at sports and wanted to be a professional athlete. Her dad got her into windsurfing, and she quickly got hooked – pestering him to drive her to competitions across the South Coast. During an impressive pro career, Christine won eight national titles, represented Great Britain at the Sydney Olympics in 2000 and most impressively, won the World Windsurfing Championships in 2003.  

Spotting a business opportunity

When she finished her professional windsurfing career in 2008, she worked in an office for five years but it didn’t satisfy her adventurous and ambitious nature. She saw kitesurfing develop as a sport and decided she wanted to get involved, so she took lessons and then an instructors course with British Kitesports, the national governing body for kitesurfing and taught for several seasons in Brighton, Australia and South Africa – gaining experience in a variety of different conditions. With many hours of teaching under her belt, Christine spotted a business opportunity; “I’m quite an ambitious person so the next logical step for me was to be able to put my stamp on teaching by opening my own school”.

In February 2014, she opened The KiTE, SURF & SUP Co in Worthing, West Sussex.

Growth & expansion

The school went from strength to strength under Christine’s leadership, and after two years of steady growth she was ready to expand. “One of the biggest costs in kitesurfing is the equipment;  it’s important to have up-to-date equipment so you have the best equipment for a range of wind conditions, for your pupil’s body weight and their experience levels.”

A business loan enabled Christine to fund more equipment and instructors, and she now offers kitesurfing lessons, ‘Stand Up Paddle’ lessons and a range of kites, kitesurfing, and stand up paddle equipment in her online store.

“ If I hadn’t had a loan from Funding Circle I would have struggled with stock levels and equipment for the school.”  Christine Johnston, founder The KiTE SURF & SUP Co.

Developing a new passion

Christine still loves to kitesurf, but she has developed a new passion – teaching others. As the reviews from satisfied pupils testify, Christine is an excellent teacher while keeping an all-important focus on safety – but she admits that when your business is growing, it is all too easy to lose sight of the thing you loved in the first place. For Christine, her new passion is teaching and a big learning for her in expanding the business has been the need to continue to find time to do what she loves and not get tied up with the day-to-day of running the school. “When you’re running a business it can be difficult to maintain a work/life balance but the quality of your work suffers if you’re on call 24/7 and always responding,” she says.

Christine tries to take one day a week where she switches off from the business by doing yoga or playing touch rugby, but she admits it isn’t easy when you are the only person responsible for your business. Her trick is to prioritize the tasks that need a fast response – “the gold dust” as she calls them – such as booking requests, which really impact her business. She responds to these immediately, fitting other tasks in around responding to customers.

The power of visualization

With a degree and a Masters in Sports Psychology, Christine sees parallels between the mental resilience that an athlete needs to win, and the drive necessary for a small business owner to succeed. Her top tip for business owners struggling with confidence is a psychology technique used by athletes called ‘acting as if’. “You act as if you’re already where you want to be” she says. “When I was windsurfing, I used to imagine I was already a top 10 competitor and this trained my muscles and my brain to get me there.” In business, she imagines the bigger business she aspires to run and behaves as if she’s already there. This technique has helped her take on roles that aren’t her natural strong suit; “when you’re running a business alone, you suddenly have to become the Recruitment Director, the Marketing Manager – things you’ve never had experience in before”. For anyone struggling with Imposter Syndrome, this technique can be a game changer.

Time spent planning can have a big impact on your bottom line

One of the biggest leaps forward for Christine’s business has been going through a ‘Profit Improvement Plan’ which is forecast to improve net profitability an impressive 600% by year end. So how did she do it? Together with her dad who is a management consultant, she looked at the profitability of every part of her business and was able to make a series of small changes which have all added up. From focusing on the brands which give her the best profit margins, to negotiating better prices with suppliers, the impact of these small changes has really impacted her profits.

For example, this exercise showed Christine that the most profitable part of her business is giving lessons, so she has developed alternative teaching plans for when wind conditions aren’t favourable on her normal beach and she’s much more focused with her own time – so now she’s able to teach 20% more lessons, directly improving her bottom line. “It’s all simple stuff”, she says, “but looking at it in black and white was essential to help me see how I could improve my profits”.

Taking the time to think strategically about your business this way is essential to achieve growth, she says.

“It’s easy to firefight all day – you get straight into answering emails, taking bookings – but it’s critical to give yourself permission to plan for your business. Time spent thinking about strategy is not time wasted.”

What’s next for The KiTE SURF & SUP Co?

Christine has just invested in new equipment which she hopes will open up a new revenue stream for her, and she’s focused on finding premises to enable her to expand the business and offer more lessons. “I was always brought up to believe I could achieve anything” she says, and with such a winning mindset, we don’t doubt for a minute that she’ll succeed.

Challenges:

  • Maintaining a work/life balance – Christine tries to take one day a week where she takes a break from the business and does yoga or plays rugby to switch off
  • In a seasonal business, it can be particularly hard to find good people who care about your business when they’re only working for you for part of the year
  • Finding a path to growth – Christine has identified finding premises as the next big step forward for her company, but finding the right location is not easy

Highlights:

  • In July 2016 The KiTE SURF & SUP Co was awarded British Kitesports Recognised School status, the highest level a kite school can reach.
  • Increasing net profits by 600% from last year, after working on a Profit Improvement Plan which has helped her increase turnover too

Find out more about how an affordable business loan can help your business fly at fundingcircle.com/business