The new ‘VAT online service’ (VOS) was launched by H M Revenue & Customs (HMRC) in November in prepartion for the compulsory online filing of VAT returns and electronic payment of liabiliies for VAT periods commencing 1st April 2010.

These new regulations will be enforced and effect all

• existing VAT registered businesses with a turnover (excluding VAT) of £100,000 or more (taken from the previous four returns submitted)
• businesses that register for VAT on or after 1st April 2010, regardless of turnover.

Once your business has been required to file online once, it must continue to do so.  The only exemptions are businesses involved in an insolvency procedure or those who have satisfied HMRC that the religious beliefs are incompatible with the requirement to use electronic communications!

If your business is VAT registered, you can expect to receive a letter from HMRC during February 2010 notifying you of your obligations.

There are proposals for this to be just the first step of the process and that all VAT registered businesses should manage their VAT returns and payments electronically from 1st April 2011.

The new VOS will enable users to

• Register for VAT
• Enrol for electronic filing
• View previously submitted electronic returns
• Set up email alerts to remind business owners of when returns should be submitted

Of course, if you do not want to be burdened with this, your accountant will be able to act as your agent in the same way as they can file payroll and self-assessment returns.  They will ask you to an authority to act (HMRC form 64-8 is not adequate for VOS) and may re-issue their letter of engagement to clarify the terms of this service.

More information can be sought from your accountant or HMRC’s online services website

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post

While some microbes are detrimental, the majority are beneficial.  These ‘good bacteria’ are called ‘probiotic’ meaning ‘for life’ in Greek.

Our bodies are full of micro-organisms — in and on the skin, in the gut, and in other orifices. Friendly bacteria are vital to proper development of the immune system, to protection against micro-organisms that could cause disease, and to the digestion and absorption of food and nutrients. Each person’s mix of bacteria varies. Interactions between a person and the micro-organisms in his body, and among the micro-organisms themselves, can be crucial to the person’s health and well-being - a very difficult and delicate balancing act.

Unfriendly micro-organisms such as disease-causing bacteria, yeasts, fungi, and parasites can also upset the balance. Researchers are exploring whether probiotics could halt these unfriendly agents in the first place and/or suppress their growth and activity in conditions like:

• Inflammatory bowel disease like ulcerative colitis and Crohn’s diesase
• Irritable bowel syndrome
• Ulcers and some types of chronic stomach inflammation
• Vaginal infections
• Infectious diarrhoea
• Tooth decay
• Stomach and respiratory infections
• Skin infections

One months supply £23.49

Designed to promote a healthy digestive system, Forever Active Probiotic is a small, easy to swallow beadlet that helps redress imbalances created by our food and lifestyle choices.  It works primarily in the colon where it assists with the process of food digestion, helping to release nutrients for absorption and contributes positively to normal human growth and development by encouraging and maintaining a balanced healthy system.

As probiotics themselves are quite fragile, Forever Active Probiotic uses an exclusive patented encapsulation technology that protects the probiotics then releases a unique combination of six beneficial strains of microbes once the beadlet has reached its optimum destination – the large intestine.

Teamed with Aloe Vera Gel drink, which cleans the gut and aids absorption amoungst other benefits, probiotics can be most efficient.  

Nutritionist Dorne Parker says “Probiotics can also help with fatigue, sleep problems, skin conditions, joints and muscles, allergies and general immune dysfunction”

Dr Peter Atherton, a GP and aloe research expert says “Probiotics are considered to be both safe and effective for preventing and treating antibiotic-associated diarrhoea and infectious diarrhoea.  They probably work by direct competition between pathogenic bacteria in the gut and immune modulation”

In summary,

• Probiotics promote a healthy digestive system
• Probiotics enhance nutrient absorption and immune function
• Forever Active Probiotic is a high quality, easy to use probiotic that doesn’t need to be refrigerated and contains six beneficial strains of microbes.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post

The designatory letters DChA are used by holders of a Diploma in Charity Accounting, a qualification awarded by The Institute of Chartered Accountants (ICAEW) who hope that it will inspire confidence that the holder of the Diploma has the knowledge to make a real difference to the prosperity of an organisation through understanding of charity accounting and financial management.

Prior to 2007 the diploma could be achieved through study and examination or by submitting evidence of experience in advising the 3rd sector.  The ‘experience’ route is no longer available.

At the time of writing this post, around 700 accountants in the UK hold this diploma (listed here) and just over half of these working in practice as auditors / independant examiners and advisers.   The remaining mainly being financial managers working with in the sector itself.

As a trustee, what does using an accountant with the Diploma mean to you?

• Confidence to trust them to provide specialist financial care with knowledge of your sector and its inherent challenges
• Reassurance that they understand the complexities of Charity Accounting
• Non-financial matters such as governance are addressed with practical solutions
• Information is presented in a straightforward and understandable manner
• Value for Money services with fixed fees and experienced resources to keep fees to a minimum
• You can get on with running your charity knowing that you are in safe hands!

In my opinion providing services to not-for-profit organisations takes additional expertise as the sector has specific accounting requirements as well as a different type environment in terms of targets, principles, reporting and management needs.  Often the people working within this sector do so for low or no monetary reward and do not necessarily have the same skills of someone who has been involved in a corporate environment.  Therefore the level of support and the approach taken to professional advice should be different.

To get the most value from your professional advisers, it is essential that they have carried out adequate and relevant professional development (CPD) and have experience in your industry.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

Media Trust, a function of the Community Voices program at Charities Aid Foundation (CAF), was organised to provide charities and volunteer organisations across the UK with resources, training, and assistance with communications and the distribution and broadcast of their current events news.

New Grant Program

Their new £250,000 grant program aims to inspire, engage and support disadvantaged and isolated communities to get their voices heard through digital media, and promises to be a boon to the many wonderful efforts of a wide variety of social enterprises.

The initiative offers grants from £1,500 to £61,000 for such assistance to programs based in England.

Two-Phased Approach

The two-phased approach begins with grants offered during the next few weeks ending 28 February 2010, and continues toward the end of this year with a second phase of funding. A total of 27 grants will be offered as of this writing.

At the launch of the program, Media Trust Marketing and Communications Services Director Gavin Sheppard said:
We are extremely excited to begin the process of allocating grants to communities where a fully interactive and inclusive digital project could have a real impact on the lives of individuals and on the wider communities in which they live.

Enhancement of Communications in the 3rd Sector

Funding will advance Media Trust’s vision that everyone should have a voice and the opportunity to be heard, and their mission to work with media organisations and charities to enhance their communications and enable communities to find their voice and make it heard. CAF, Community Voices and Media Trust can all be found at Facebook and Twitter.

This post was written by valued twitterbuddy Nathalie Allard of Raspberry Frog.

 The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

If 2009 had one defining moment it was Social Media moving from buzzword into the mainstream conscious, with everyone from celebrities to politicians embracing the power of social content and conversation to drive actions.

Big brands were of course at the forfront often driven by a desire to have a first mover advantage in the press or reacting to some PR disaster that overtook their traditional PR and Marketing teams.

For my mind the big winners of 2009 were not the politicians or the big brands but charities small and large right across the world who were able to get awareness of their campaigns or services in front of a whole new Social Audience people who love to talk about and share the work of good causes with their own audiences.

Social Media has create an explosion of good will, from Pro-bono services to fundraising all driven by the open lines of communication created by sites like Facebook and Twitter.

The Social Dynamic Duo

There’s no denying that Facebook and Twitter have become the must use Social Age tools and should form the core part of any Social Strategy, together they create a powerful team and can feed each other and reach into different demographics creating unique social interactions.

Ask and you shall receive

In the Social Age asking for help is more than acceptable it’s expected, got a cool new project and need an expert to give you some advice? Ask your Social Supporters on Facebook and Twitter if they can’t help,they will usually pass the message along or flag it to their community if they can’t help personaly.

This dosen’t stop at just pro-bono services but also fundraising if you have positions to fill on events, ask your Social Networks to help fill the spaces.

In the social age the conversation is king.

The organisations that find the most value and worth from Social Media not to mention create the most powerful social actions are the ones that talk, and not necessarily about just their own cause.

Go off topic from time to time, talk about the weather or TV events that have captured the public imagination, shows like Doctor Who or sporting events (Olympics, World Cup) that cut across the usual demographic divides are a great way to build relationships with existing supporters and bring in entirely new supporters to your cause.

Team up with other organisations on Twitter and Facebook that have broad or similar goals to your own, cross promote each others social messages to encourage supporters to cross the divide.

Don’t look at others orgs as competition instead look on them as a way to build even more relevant networks and share in Social Success.

2010 is the year for your Charity / Non-profit to embrace Social Media and become part of the age of Social conversation, make a start today and setup a Facebook Fan Page and a Twitter Profile

With thanks to valued twitterbuddy and BullyingUK ambassador, John Carnell of TechnicaVita for allowing me to reproduce this post.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

People often ask “what is business coaching?” and in truth there are lots of ways to describe it.  In this post, Lee Duncan a well respected business coach that I have worked with for the benefit of my clients, will focus on four elements that work together to get results in any area of your life. 

Business is all about getting results.

For most of us, this means achieving a level of financial success from the businesses we create.  The principles of business are actually quite straightforward, although in practice it often turns out to be more tricky.

A formula that’s useful to focus the mind on what to do next is

Attitude+Goals+Knowledge+Action=Results

The first key to success is attitude.

Henry Ford famously said, “If you think you can, or you think you can’t, you’re probably right”.

Just think about that for a moment. If you start out with the notion that you’re going to fail, you will. I know of a psychologist who calls this a self-fulfilling prophecy.

It works the other way around though too, which is far more exciting. If you believe you will succeed, you probably will. As a business coach, it’s clear that many clients need some help to have confidence and a positive mental attitude.

Next up, you’ve got to have a goal.

A goal is like a destination for a taxi trip. When you jump into a taxi, the driver wants to know where you’re going to go before he’ll move off. That’s just the same as your brain. If you want to get somewhere with your business, you’ve got to focus on where you want to go before you can move towards it. Goals should be set to be stretching, but achieveable.

The third part of the formula is to have the correct knowledge.

Many of us know what we should be doing to be more successful, it’s just that we don’t do it. On the other hand, sometimes we simply don’t know how to do something and so we remain stuck.

By attending seminars, reading books, listening to CDs and watching video, we gain knowledge. With practice we can turn this knowledge into skills that help us to achieve our goals. Skills like how to write effective sales letters, or how to create a blog, or how to manage staff effectively, can all be learnt by anybody. Great results can also be described as the successful application of the right knowledge. Make the effort to get the learning habit, you won’t regret it.

The final step on your way to results is to take action.

Great ideas are simply notions until somebody turns them into reality.

If you’re an ideas person who finds it hard to bring your ideas to life, you’re a dreamer. If you have no ideas but keep turning the handle and expecting different results, you’re a madman.

The happy middle road is where success lies – a great idea combined with the right actions, taken relentlessly day after day, to achieve success.

When any single piece of the formula is missed, you’ll struggle to achieve your desired results. That’s where business coaching comes in, to help you bring all of these things into alignment for you.

When you achieve results, no matter how big or small, take the time to celebrate and enjoy your successes. Too often in life we beat ourselves up for failing and don’t notice what we have actually achieved. Start to notice how good you are, how successful you are, and you’ll be successful more often and in bigger ways.

Read about the kind of results that Lee’s clients enjoy in a story from a member of the Chris Cardell marketing club who also works with Lee. 

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

One of the key roles of the Charity Commission is to encourage charities to adopt good practice.  They have set out six clear principles to communicate their definition of an effective charity in their guidance booklet CC10.

For a full copy of this guidance click here.  In brief, these ‘hallmarks’ suggest that a charity that is effective and well governed

• Is clear about its purposes, mission and values
• Has a strong, clearly identifiable board or trustee body that has the right balance of skills and experience
• Is fit for purpose i.e. is structured appropriately to deliver efficient services
• Is continuously learning and developing to maximise the impact of its work
• Is financially sound and prudent.  It controls the use of valuable resources to maximise its potential
• Is accountable to the public and its operations are transparent and understandable to all stakeholders.

It is the Trustees’ responsibility to ensure these hallmarks are in place.

If your organisation needs assistance in developing these key principles or would like an audit of its effectiveness, please get in touch.  I use my own experiences as an accountant and auditor working in the 3rd sector in conjunction with sourcing highly skilled professionals from my business network to create a bespoke solution.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

During an economic downturn both individuals and organisations can suffer from adverse pressure, increasing the motivation for fraudulent behaviour.

Organisations are at risk from fraud both internally from employees and shareholders, and externally from suppliers, contractors and other organisations.

According to KPMG (data: July 2009) more than 160 cases of serious fraud, worth in aggregate £636million came to UK courts in the first half of 2009, the highest number of cases in the 21 year history of the KMPG Fraud Barometer.

Fraud has many guises such as ineligible claimants of state benefit, money laundering and unauthorised sharing of databases.

Internal Fraud: Warning signs might include

• Staff who have personal financial problems or have lifestyles not commensurate with their remuneration
• Employees who work late or appear to be under stress without a heavy workload
• Staff under pressure from unrealistic targets set by management or heavy emphasis on performance related pay.
• Internal and/or external complaints about certain people/teams
• Unwillingness to delegate and/or reluctance to take holidays
• Over-friendly relationships with external stakeholders
• New staff resigning quickly as they are uncomfortable with ‘unusual behaviour’ but do not wish to report it

External Fraud: Warning signs might include

• Insistance on dealing with one individual
• Cash only or high volume, low value transactions
• Unusual/sporadic payment behaviour
• Increased prices without explanation
• High staff turnover and/or lack of management control

Obviously, these are only indicators and you should not accuse anyone just because their behaviours fit one of these points!

In a future post I will provide ideas on how to reduce the risk of fraud to your organisation.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

History and culture has fuelled belief that Trustees can not be paid for their time, expertise or services rendered.  Whilst they should not be paid simply for acting as a Trustee, Chapter 9 of the Charities Act 2006 includes a statutory power that allows trustees and connected persons to be remunerated for goods and services they provide to the charity, subject to specific safeguards being in place to prevent abuse.

The biggest stumbling block is the governing document. 

As many charities were formed prior to the 2006 Act, standard clauses are often included in incorporation documents, constitutions or trust deeds that specifically prohibit trustee remuneration.  Obviously, this needs to be overcome before any further consideration can take place.  Amendments to governing documents are often complicated and time consuming due to their ‘public’ nature and may need to be approved by the Charity Commission.  Read guidance.

Safeguards

Assuming such a clause does not exist, the safeguards specifically mentioned by the 2006 Act are:

• The trustees must demonstrate that they have consulted Charity Commission guidance and have decided that it would be in the charity’s best interest for the services to be provided by the trustee/connected person.
• There must be a written agreement between the individual and the charity recording the terms of the arrangement and specifically the amount of remuneration agreed.  The individual being remunerated must not be involved in any decisions or other matters related to this agreement.
• The amount of remuneration agreed to be paid by the Trustees must be reasonable for the level of service being provided.  In other words, there needs to be evidence that the Trustees are utilising resources in a commercial manner.  This is a key principle of Trusteeship.
• Only a minority of Trustees can be remunerated in any form.  So if there is a small Board, take care.

A charity trustee should not be in a position where any personal interest may conflict with their role as a trustee.  They should not benefit directly or indirectly from their position whether through payment in money or benefits in kind.

A working example

A small charity has a part time bookkeeper who reports to a practicing accountant on the Board of Trustees. 

In order to qualify for a grant, the charity has been asked to put together a departmental cash flow forecast and some projected profit and loss accounts.  Obviously the person best placed to do this would be the Trustee as they understand the organisation and the requirements of the grant making body and have the relevant competancies, but they do not have the time.  They are in business full-time and offer their experience and personal time as a Trustee, for emotional motives. 

In the past, the Charity would have no choice but to engage an accountant to carry out this task, incurring professional fees, probably at full market rate as well as investing time to properly seek out, appoint and brief the professional.

The 2006 Act, acknowledges that it would make sense to engage the practice that their Trustee is involved with as this would be efficient and fees may well be negotiable.

In my view, this is a positive step towards making the 3rd sector more commercially aware, something I am passionate about.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.

Apologies for the length of this post by fellow HBNer and client, Gareth Howell of Agdon Associates, but it is full of information for anyone considering migrating to the new, all singing, all dancing offering from Microsoft.  It also clearly demonstrates Gareth’s knowledge and passion for helping small business.

Moving to Windows 7 from XP is painful: reduce it with virtualization.

It’s old news that Windows 7 is now available and the response has been pretty positive. In fact, far from the response being “well, at least it’s not Vista!) respectable people have been singing its praises. However, there is a sting in the tail: it’s not possible to upgrade directly to Windows 7 from XP (at least not in the sense of being to upgrade and then carry on working).

The upgrade path from XP requires a clean installation and the preservation of your personal files only: no applications are migrated across.

This is a major problem for anybody who chose to avoid Vista, relies on a PC for their day to day business and doesn’t have a spare. Re-installing applications can (literally) take days if one includes the inevitable upgrades and service packs that have been released since you bought the installation media. Of course, this also assumes that you have the original installation media. Oh, and the license codes.

Take heart though, if you follow my (fairly) easy to follow sequence of steps, you can migrate to Windows 7 without losing productivity.

In summary, we’re going to use virtualization technology to preserve your XP environment in the new Windows 7 world and disconnect the process of re-installing applications from that of upgrading Windows. What we will do is:

• Buy a new, larger, hard disk
• Clone the old XP installation on to the new disk
• Boot from the new disk and upgrade to Windows 7
• Create a Virtual Machine to contain the original XP installation.

Once you have gone through this process you can choose when to re-install specific application on Windows 7 because you will still have access to them on XP from day one.

At the end of this process you will have a clean Windows 7 environment plus seemless access to your XP environment; using the excellent “Unity” feature in the latest VMware Player

So, in more detail

Step 1 – Buy a new, larger, hard disk

Buying a new disk makes this all so much easier, though there is a gotcha if your machine is a laptop. I’ll get to that later.

The chances are that you will need a larger disk anyway. In my case my T60 had a 120GB drive, of which about 80GB was used. That means we need at least 80GB of free space on the Windows 7 environment in which to store the Virtual Disk that contains the original XP environment.

In my case I bought a 320GB Seagate drive. This was bigger, faster (7200RPM rather than 5400RPM), quieter and more power efficient. All for £48.00 !

The gotcha!

This only applies to laptops that have space for only a single hard disk. The point is that in a while we will need to have two bare hard drives attached to the computer, and most laptops allow for only one. There are two ways around this. One involves using a third external hard drive (either USB connected or network connected), the other requires a USB connection kit with which you can connect a bare drive to your computer.

As I already had one of these adapters, I went for the latter, but I will cover both options.

Step 2 – Clone the existing XP installation on to the new disk

There are a number or ways to do this and your choice will depend on whether you have the appropriate software and how the new drive is attached to the computer.

Option 1 involves using your backup system (you do have a backup system don’t you !). Option 2 uses a technology such as Norton Ghost to image one drive to the other.

Option 1: Using your backup System

I use Windows Home Server to backup all the computers in the Howell household, so I knew I could use this to move to a larger disk.

• First, I made sure I had a full backup on the Server (it happens automatically every night, but there’s no harm in forcing a manual backup just to be sure).
• Second, I swapped the new drive for the old and booted the T60 from the Home Server Restore CD.
• Third, I followed the wizard to restore the last image from the Server and rebooted. In the wizard, I chose to create a 200GB partition for XP as I intend installing Windows Server 2008 in the other.

At the end of this I had the original XP environment running from a larger disk with plenty of free space.

Option 2: Using Norton Ghost

Caveat: Although I have used Ghost to clone disks before, I did not use this approach this time because I was upgrading a laptop and needed USB drive support. This is not available by default in DOS. I know there are solutions to this, but I decided to take the line of least resistance.

With this approach, you attach both disks to the machine, then boot the machine into MS-DOS and use Norton Ghost to clone the disks.

If you are working with a Desktop where both hard disks are internally attached via ATA or SATA, and you can get the necessary software, then this approach is much faster as it avoids the need to restore from a backup. There are several resource on the Net that can guide you: try entering “Clone disk with DOS GHOST” into Google.

Step 3 – Upgrade to Windows 7

Despite your not being able to do a true upgrade from XP to Windows 7, you can still buy the Upgrade version of Windows 7. It just means that the installer checks for a valid XP installation before installing Windows 7. Upgrading is just a matter of running the setup program from the Windows 7 DVD and opting for an Advanced Installation. You will be warned that all your files will be wiped: hence the need for a full backup.

Don’t forget to choose the correct partition if, like me, you opted to create two partitions on the new disk.

Incidentally, I didn’t elect to install all the updates as part of the installation process. I probably should have but I was in a bit of a hurry. Instead, I ran Windows Update straight after the installation was complete.

One point to note was that I gave the T60 a new machine name so that the backup process preserved the old XP installation as well. Also, you will want to have both “computers” on the network at the same time. At the end of this, you will have a clean installation of Windows 7 with no applications installed.

The next immediate step in my process was to install the Windows Home Server connector and perform a backup. Note: you will need to ensure that Windows Home Server Power Pack 3 has been installed for this to work properly.

Step 4 – Create a Virtual Machine for Windows XP.

At this point we have a functional Windows 7 environment and we have a known good backup of the old XP environment. We also have another hard disk with the original XP environment installed on it. What we now need to do is virtualize the XP environment.

Virtualization is the process by which a single computer (called the Host) is able to run a number of Virtual Machines (called Guests). By the wonders of virtuallization, each Guest believes it has complete control of a physical computer. In fact it can only see virtual devices that are then mapped on to the physical resources of the Host computer.

Once again, you have a choice of how to do this as well as choices over whose virtualisation software to use. Both Microsoft and VMware Corporation have excellent desktop virtualization products. Personally, I have been using VMware Desktop since version 1 and I know it’s very good. In this case, luckily, we don’t need the (paid for) power of VMware Desktop, we just need the less capable, but free, VMware Player.

We also need another VMware utility called VMware vCenter Converter. Converter converts a physical machine into a Virtual Machine [VM]. Physically, the VM comprises a collection of files located on the filesystem of the Host computer. When VMware Player is run, it loads the files for a particular Guest computer and causes the Guest computer to run, interact with the screen, network, printers etc and access a virtual filesystem on a virtual disk.

You need to decide where you are going to store the converted VM. Eventually it needs to reside in the Windows 7 partition on the new hard disk. Whether or not you can go straight there or have to go via a third disk depends on your computer. If you can have both the old and new hard disks installed at the same time (true for most desktops), then you are OK. If not, true for most laptops, you can either:

• Use the drive adapter to connect the new bare disk to the laptop, or
• Use another external USB drive of suitable capacity as a temporary home.

Either way, you are going to create a new VM containing the XP environment.

1. Replace the original hard disk.
2. Either connect the new hard disk via the USB adapter, or connect the third external USB drive.
3. Boot into Windows XP, then download VMware vCenter Converter from the VMware website (it’s a free download but you will need to register).
4. Use the Converter software to create a VM on the external drive (or on the second internal drive in the case of a workstation).
5. Shut down and install the New Hard Disk for the last time.
6. Boot into Windows 7
7. Go back to the VMware site and download VMware Player, then install it.
8. If necessary, copy the newly created VM from the external USB drive to a suitable folder on the Windows 7 environment. I have mine stored in C:\Virtual Machines

Another Gotcha!

I hit a gotcha at step 4. Running Converter is a simple case of follow the wizard’s prompts, but I did get a confusing error message about not having the appropriate SysPrep files on the computer. After some digging I found that I needed to download the Windows XP Service Pack 2 Deployment Tools from http://snurl.com/tscop, Open the CAB file with WinRAR and copy the files to the folder designated in the error message.

Now, you you should be able to run VMware Player and use it to run the XP Virtual Machine.

NB To avoid getting errors, you need to run Player in Administrator mode. You do this by Right-clicking on the desktop shortcut and selecting “Run as Administrator”. To avoid having to do this everytime, you can set this option in the applications preferences; which are accessible from the Right-click menu.

Also, because the SSID of the vrtual machine has changed, you will need to re-enter your XP license code and re-activate.

Et voila, you have a working Windows 7 environment complete with a virtual XP environment containing your original machine.

Make sre you install anti-virus software on Windows 7 straight away. Once the XP VM is running, enable “Unity” mode on the VM menu in the Player window so that a new XP menu bar appears on the Windows 7 desktop.

Now, at your leisure, you can install applications on the Windows 7 machine to replace those on the XP machine. Over time you will gradually use the XP machine less and less until you either stop using it altogether, or it is reduced to running a rump of applications which cannot be migrated to Windows 7 or are not worth being so.

One Last Thing, keeping the data in sync across the two machines.

Bearing in mind that you now have two computers, how do you keep the filesystems synchronised?

I use Windows Live Sync for this, but I adopted a divide and conquer strategy: partly because of the 10,000 file limit imposed by Live Sync for any single synchronisation point.
Before doing anything, I considered the contents on my XP machine. Some files I would definitely need in Windows 7, some I would not. Some were in the “My Documents” hierarchy, others were not.

Windows Live Sync works by defining synchronisation points on multiple computers. Live Sync then keeps the folders and files beneath each set of synchronisation points in sync with each other.

In my case, under “My Documents” I have a folder hierarchy called “Shared” containing folders and files I definitely want synchronising. I have another called “Development” and then several others; including a couple outside of “My Documents”. Each of these is defined as being a Synchronisation Point in Live Sync. It is then a simple case of following the Live Sync wizards to create equivalent sync points on other machines.

Provided you are connected to the Internet, the files will be kept in sync. Changes are queued if you are not connected to the Internet.

Summary

I hope that you have seen how you too can move from your existing XP based computer to a clean Windows 7 environment whilst maintaining access to you old XP applications, and how (relatively) easy the process is. By following this process you will reduce the time you are without a functioning PC to in the order of 2-3 hours, rather than the 2-3 days that might otherwise occur.

I hope this process proves useful to you. If you have any questions or clarifications based on your specific experience, please share them as comments to this post so that all can see them.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.