Category: Start-Ups

How to Create a Balanced Business Budget

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Creating a balanced business budget can seem like a daunting task, but it doesn’t have to be. There are a few simple steps that you can take to make sure that your budget is both realistic and achievable. We’ve put together a step-by-step guide to creating a balanced business budget so that you can take the guesswork out of the process.

Step 1 – Calculate Your Income

The first step toward creating a balanced business budget is to calculate your income. This may seem like a no-brainer, but it’s important to be as accurate as possible when estimating your income. After all, your budget can only be as balanced as the income that you’re bringing in. To get started, take a look at your past few months of financial statements and try to come up with an average monthly income.

If you’re just starting out, it’s important to be realistic about the amount of income that you can realistically expect to bring in. Don’t forget to account for seasonal fluctuations in your business’ income.

It’s also important to consider all of your streams of revenue. If you’re selling products, be sure to include both the cost of goods sold as well as any shipping and handling fees.

After you’ve calculated your income, it’s time to move on to expenses.

Step 2 – Fixed Costs

In order to create a balanced budget, you need to figure out what your business’s fixed costs are.

Fixed costs are those expenses that stay the same each month, such as rent, utilities, and loan payments. These are non-negotiable expenses that you have to pay no matter what.

Step 3 – Variable Costs

Variable costs are those expenses that fluctuate from month to month, such as inventory, shipping, and marketing.

The key to creating a balanced budget is to make sure that your variable costs don’t exceed your income. This can be a challenge, but it’s important to keep an eye on your spending in order to stay within your budget.

Your variable costs will increase along with volume of production. So if you sell more, you’ll send more. It is important to track your variable costs closely as your business grows.

Accounting software can help you track your income and expenses so that you can see where your money is going each month. This information can be helpful in creating a realistic and achievable budget.

Step 4 – One-Off Costs

There are always going to be one-time costs associated with running a business. These costs can include things like equipment purchases, website development, and trade show fees.

When budgeting for one-off costs, it’s important to consider both the short-term and long-term impact of the expense. For example, a new piece of equipment may be a large upfront cost, but it could save you money in the long run by increasing efficiency.

Step 5 – Consider Your Cash Flow

Another important factor to consider when creating a budget is your business’s cash flow. Cash flow is the amount of money that is coming in and out of your business each month.

It’s important to have a positive cash flow in order to maintain a healthy budget. If your expenses are higher than your income, you’ll need to find ways to cut costs or increase revenue.

There are a number of ways to improve your cash flow, such as offering discounts for early payment, setting up automatic payments, or offering payment plans.

Step 6 – Putting It All Together

Now that you’ve calculated your income, expenses, and cash flow, it’s time to put it all together to create a balanced business budget.

However, you can’t just create a budget and then set it aside. You need to revisit and review it regularly to make sure that it’s still accurate and on track.

As your business grows and changes, your budget will need to change too. Be sure to review it at least once a month to make sure that it’s still in line with your current situation.

Creating a balanced business budget is an important part of running a successful business. By taking the time to calculate your income and expenses, you can ensure that your business is on track for long-term success.

Quick Tips: Registering for Value-Added Tax (VAT)

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When first setting up your business, there are multiple decisions to make – and a key consideration will be whether to register the business for Value-Added Tax (VAT), the tax that’s added onto the price of certain goods and services.

When does VAT registration become mandatory?

When your business’s turnover reaches £85k over any rolling period of 12 months, it’s currently mandatory for you to register for VAT. Because of this, it’s important to keep an eye on your turnover and to start making plans for VAT registration as you get closer to the threshold.

Is it better to be VAT-registered?

Where your customers are VAT registered, you’ll always be better-off registering – as long as you don’t mind factoring in the minor administrative work that’s required.

As a VAT-registered business, you can add VAT to your selling prices without it actually costing your customers more – VAT registered customers just claim the VAT back from HM Revenue & Customs (HMRC). You can also reclaim VAT on your own expenses in the same way. If the administrative work is a concern, the flat-rate scheme is a more straightforward alternative.

What happens if my customers aren’t VAT registered?

If you’re a business-to-consumer (B2C) company, your consumer customer base is unlikely to be VAT registered. In this circumstance, if you charge your customers VAT, they’ll end up paying more for your goods/service – which could affect your competitiveness in the marketplace.

Think about whether this additional VAT cost is likely to have an impact on your sales. Then weigh that against the additional costs you’ll incur if you don’t register – and, as a result, can’t reclaim VAT on your costs.

Why would I register early for VAT?

Legally, you don’t have to register for VAT until you meet the £85k threshold. But some businesses operating below the registration threshold choose to register voluntarily.

Some companies believe being VAT registered makes the business look more substantial and professional. And some businesses will register to make use of the ability to claim back VAT on certain business expenses, especially if these are for significant assets.

Talk to us about registering for VAT

For a new business, even if you anticipate that your sales will go over the £85,000 registration threshold in the first year, there may be advantages in delaying registration until you have to. Equally, there may be benefits in registering even if you are trading below the threshold.

Tell us about your business plans and we’ll be happy to advise you on the best point in the business journey to register for VAT.

Startup Tips – Setting up the foundations

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To trade as a business, you need to meet the right compliance requirements. It’s certainly not the most exciting part of creating a business, but setting up the right legal, accounting and tax compliance foundations ensures that you’re doing everything by the letter of the law.

Here are the main compliance steps to think about, and why they’re so important to the smooth running of your business.

Decide on a legal structure for the business

First off, you’ll need to make a decision about the legal structure of the company. There are two key choices here – incorporated (a limited company) or unincorporated (usually either a sole trader or a partnership). The key difference here is around liability. In other words, do you want your business to be a limited company, where you and the business are treated as separate legal entities? Or do you want to be unincorporated, like a sole trader, where you and your business are seen as one single entity.

Open a business bank account

To trade, take payments and pay your suppliers, Ltd companies need to have a business bank account that’s separate from your own personal current account, this is also highly recommended for all businesses. This helps to create a tangible divide between the money you’ve generated from the business, and your own personal cash.

Most high-street banks won’t let you use a personal current account for business purposes. Banks will offer a variety of different business accounts, with varying levels of fees, overdraft levels and additional business features. Set up the business account and then use this account for ALL transactions going in or out of the business.

Set up a bookkeeping and accounting system

It’s a legal requirement for your limited company to keep adequate records and to submit annual statutory accounts. To be able to meet these requirements, it’s essential that you have a bookkeeping process and a reliable accounting system in place.

There’s a dazzling choice of different cloud-based accounting platforms aimed at the ambitious startup owner. Xero, QuickBooks, MYOB and Sage are big names in this space, and all offer easy-to-use systems that make the accounting process relatively straightforward. It’s a good idea to engage an accountant, right from the start, to get the best possible accounting advice.

Register for the relevant business taxes

Tax is an unavoidable part of running any business. It’s mandatory for you to register for the relevant business taxes, and you’ll also need to factor in that a certain percentage of your profits will end up going to the tax authorities at the end of each financial year.

If you’ve opted for the limited company route, you must register for corporation tax. Corporation tax is paid based on a percentage of your year-end profits, once reliefs and other allowances have been taken into account. Approximately a quarter of your end profits will end up being paid over in tax, so it’s imperative that you put this money away in a separate tax accounting, or ring-fence it in your accounts, so you have the money to pay the bill at year-end.

Other taxes to register for include:

  • Self-assessment income tax – although you’ll pay corporation tax on your company’s profits, directors are also taxed on their own personal earnings too. If you’re an unincorporated sole trader, this is also the way you’ll be taxed on your business profits, as your personal and business income are treated as the same thing.
  • VAT – is an indirect value-added tax for goods and services. If your turnover is over £85,000 or you opt in, you’re responsible for collecting these taxes and paying them to the tax authority on a quarterly basis.
  • Pay-as-you-earn(PAYE)– if you have employees or CIS subcontractors, you’ll need to make income tax deductions from your employees’ wages and pay these taxes directly to the relevant tax authority. This is all done via your regular payroll or CIS run.

Get in touch to talk through your compliance needs. We’ll help you understand which taxes apply and how you register for them.

How to Set Business Goals For 2022 (And Beyond!)

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Setting goals for your business is an important step in making sure it thrives. While some people might think this is a simple task, it can be more complicated than you may think. This guide will walk you through the process of setting goals and provide tips on how to make them actionable, achievable and measurable.

Why Are Business Goals So Important?

Business goals and objectives are important and should be established for a number of reasons.

If you don’t define what success looks like, the chances are that your business will never achieve it.

You need goals to measure growth by comparing them from year to year or month to month. If you’re not seeing the results that coincide with your expectations, then it’s either time to adjust your goals or get to the bottom of why you cannot meet them.

Goals are also important because it shows that you’re organized and have a plan in place, which is especially helpful when raising capital for growth. It lets potential investors know what milestones to expect throughout the process of investing into your business.

Goals keep you and your team focused, and provide a clear benchmark against which to measure your success. Clear goals enable you to prioritise the most important tasks and focus on the things that matter most.

Step 1: Identify Key Areas Of Focus

First things first. What are the top areas you want to focus on in your business? Of course, this depends on your unique business and industry, but some examples to consider include:

  • Improve customer service
  • Reduce costs by 10%
  • Grow sales volume by 20%
  • Be the first mover in your industry with a new product or service offering
  • Increase employee satisfaction to 75%
  • Improve customer retention rate by 5%
  • Reduce company debt and interest expense below a certain threshold, e.g. $40,000
  • Increase profit margin by 10%
  • Reduce time required for product or service production by 12%

Step 2: Set SMART Goals

In order for your goals to be effective, you need them to meet a specific criteria. They must be SMART. This means:

  • Specific  – very clear and easy-to-understand.
  • Measurable  – determined by the numbers or data.
  • Achievable – your goals must be realistic, or else you are simply setting yourself up for failure.
  • Relevant –  each goal should be pertinent and directly beneficial to your business.
  • Time-bound – the deadlines must be clear and reasonable.

“Increasing profit margins” is not a good goal because it’s far too vague. However, “increasing our profits by 10% in the next 12 months by reducing costs and increasing efficiency”  is an example of a SMART goal.

Step 3: Set a Timeline

Your goals need to have a timeframe. This is important because it helps you think about which resources are required, how much time your goals will take and what milestones must be reached along the way. For example, you won’t increase your profits by 10% overnight – it will happen in much smaller increments. Therefore, you should set milestones that will be reached along the way. For example, you might aim to increase profits by 4% by the end of Q1. Then, you can adjust your goals against real-time progress.

Step 4: Review Your Goals Regularly

It is crucial that you regularly review your goals to ensure they are still relevant and helpful. You may find that the market has changed, or that new opportunities have emerged based on customer feedback which would alter some of your original plans – this means it’s time for an update. Maintaining four or five year goals is a good idea, but you should also create one-year and quarterly plans to ensure your business stays on track.

Step 5: Accurately Track Your Goals

You cannot measure progress unless you are measuring against something specific – that’s where SMART goals come in. You need to establish metrics and benchmarks against which you can measure your progress. This way, it’s easier for everyone to see whether they’re on track towards achieving the goal and when adjustments need to be made.

Final Thoughts

Clear goals provide a clear direction for your business and keep everyone on the same page, working towards achieving something that is meaningful and beneficial to all. They can be used as an effective tool when pitching to investors or potential partners to give an idea of how the business will progress over time.

No matter how well your business is doing, there are always areas for improvement and new heights to reach. Setting goals is the first step on the journey to success..

How to Set Up and Maintain a Budget for Your Startup 

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Creating and following a realistic budget for your startup is essential. In fact, it can even determine whether or not your business makes it out of the gates. A budget shows you how much money you’ll need to make in order to break even and highlights what you can and can’t afford. It also helps you to forecast and manage your cash flow, which is essential to keep your business in good financial health. Budgeting can be a daunting task but this guide is here to make it easy by breaking it down into four simple steps. 

1. Calculate Your Costs

It takes money to make money, and it’s important to work out how much you’ll need to launch your business. Think about what you’ll need in order to start serving customers, whether that means setting up a website or opening the doors to a brick-and-mortar establishment. You can generally group your costs into three main categories: 

  • Facilities: this could be the location of your shop, restaurant, co-working space or offices. If you haven’t found the right place yet, it’s worth doing some market research to give you an estimate of how much the rent or mortgage will set you back. However, the costs don’t always end there. You might need to remodel your chosen location to fit the needs of your business. 
  • Capital Expenditure: this is how much money you’ll need to maintain and improve your facilities. Office furniture, equipment and decorations all fall under this category. 
  • Materials and Supplies: these are the items you’ll need to use in order to run your business, such as ingredients for a restaurant or beauty products for a salon. 

Remember to stay mindful of smaller costs; it may be tempting to overlook them, but they can add up very quickly.

2. Work Out Monthly Expenses 

Your monthly expenses are the costs associated with the items and services needed to run your business. You’ll need to have an idea of how much you’ll be spending each month in order to calculate the amount you’ll need to earn to break even. These expenses fall into four different categories:

  • Fixed expenses stay the same each month. Examples of fixed expenses include rent, internet packages, subscriptions and insurance.
  • Variables are more difficult to predict as they change in line with your volume of sales. Supplies, shipping costs and raw materials are all variable expenses. 
  • Semi-variables are fixed costs which can become variable if production volume dramatically increases or decreases. A surge in demand might require you to pay your staff overtime or result in a higher electricity bill than usual. 
  • One-time expenses are often unforeseen costs such as equipment repairs, but also might account for planned events such as business conferences. 

3. Estimate Your Monthly Revenue 

It’s difficult to know how much you’ll actually earn during your first few months in business. What’s more is that your monthly revenue is likely to fluctuate, so do your research and take a look at how similar business models fare throughout the year. If you’ve hired an accountant or financial consultant, they might be able to offer some valuable insight. Factors such as retainer contracts and industry-wide seasonal trends will also help you to predict what your income. However, it’s advisable to remain conservative with your estimates to prevent overspending. 

4. Review Cash Flow 

Cash is king in business and maintaining a healthy cash flow is essential for survival. Bear in mind that you won’t always be able to collect money for your goods and services straight away, which can lead to cash flow issues even if profits are sky-high. A booming sales month is great, but you may have bills that are due before you’re able to collect payment. If you don’t have money set aside for this instance, you’ll find yourself in hot water. In this sense, cash flow is just as important as profit for the financial health of your business. 

It’s wise to set aside some business savings for times when the cash flow slows to more of a trickle. Review your cash flow each month to spot patterns, prevent overspending and budget for the future. 

The Golden Rule 

Finally, it’s important to follow the golden rule as you work through the above steps: stay conservative. Highball your expenses estimate and be prepared for low sales. This helps to protect your profits and keeps you on your toes to prevent overspending. Careful budgeting allows you to make prudent financial decisions and keeps your startup on track for financial success.

The Five Traits of Successful Entrepreneurs

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About 20% of businesses fail during their first year. So which traits should an entrepreneur have to become successful in a highly competitive environment?

Starting a business isn’t easy, especially in the modern environment that favours sound, long-lasting practices and a severe loss-aversion mentality. 

While not everyone is born to be an entrepreneur, there are skills one can learn to jumpstart a business venture in a competitive industry. And even be successful at it.

It’s important to note that some traits can’t be learned and are what separates a good entrepreneur from the best. The list of traits found here includes both intrinsic and trainable skills.

1. Inventiveness

One of the key features of successful entrepreneurs is their ability to come up with new ideas and expand on existing features. That’s why most entrepreneurs start their business with an idea that deviates from and improves upon the current norm.

While it’s almost impossible to teach someone how to be inventive, all people possess virtually unlimited imagination and potential. Tapping into that can lead to exciting results.

2. Confidence

One of the crucial parts of a successful start-up is the pitch. A good entrepreneur needs to have confidence both in themselves and their idea. That confidence is what will sell the start-up to potential investors and allow the business to begin operations.

Entrepreneurs will face rejection along the way, and only those who remain confident enough to keep going will bounce back and thrive among the competition.

3. Work Ethic

The term ‘passion’ is often thrown around as a desirable trait, but it would be more proper to call it work ethic. 

While an entrepreneur will enjoy doing what they created, a proper work ethic is what truly matters.

An entrepreneur needs to put long hours into their business to take it off the ground. That won’t be possible if they don’t love their work or have a developed work ethic to sustain it.

4. Money Management

One of the critical reasons start-ups fail over their first few years is the futile acquisition of capital. This isn’t so surprising, seeing as banks are unlikely to provide large loans. 

Other methods of raising capital, such as crowdfunding or investing, often depend on tangential skills like the ability to persuade people about the idea.

While having a good idea is the key for a start-up, obtaining and managing the capital required to make it into a reality is what separates a successful start-up from a failed one.

5. Knowing Market Needs

While not a trait per se, knowing that an idea for a start-up has real market value and need is what gets a start-up off the ground. 

The ability to develop and market an idea into an attractive product relies on more skills than one, but they all need to combine to deliver to the masses.

According to Forbes, most start-ups fail due to a lack of market need. Therefore, identifying whether a novel idea is useful and adjusting it to cater to the audience should be one of the top priorities.

Learning What It Takes to Succeed

Thankfully, most of the traits of a successful entrepreneur are learnable. For all others, there are always people who can help out and make up for personal shortcomings. 

Teamwork makes the dream work, after all.

Accounting and Bookkeeping Basics that Every New Solopreneur Needs to Know

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Starting a new business venture by yourself is incredibly exciting, but it can be daunting, too – especially when it comes to accounting and taxes. The sooner you begin to learn about accounting, the less likely you are to run into trouble, which is why we’ve put together a basic accounting guide for new sole traders, contractors and freelancers who need a nudge in the right direction. 

Separate Business and Personal Bank Accounts

They say you shouldn’t miss business with pleasure and this is especially true when it comes to banking. It’s important to create a separate bank account for your business expenses and transactions, for several reasons.

Firstly, this creates a log of your business-related transactions. This saves you from having to comb over your records and try to remember whether each purchase was business-related or not when tax season rolls around. As a consequence, you’re less likely to miss out on tax deductions and end up paying more than necessary. 

A separate business bank account makes it easier to monitor your cash flow situation and understand how much you can afford to spend. It also helps to maintain business credibility, which is important when seeking financing. 

It’s also worth arranging a business credit card. Business credit cards typically have a higher limit than personal ones, which is useful since business expenses tend to be higher, too. This will help you to smooth out any cash flow issues you face without putting your personal credit score at risk. 

Invoice Management 

Invoice management is a simple but crucial part of effective cash flow management. Not only is it important to send invoices on time, with a clear itemised bill and the correct payment information, but you also need to be proactive about chasing up late paying clients, too. 

Track Expenses

Track everything from client lunches and printer ink to office rent and software subscriptions. Carefully tracking your business expenses keeps your financial records crystal clear and helps you to maximise your tax deductions. As well as using a business bank account or credit card to keep your records, it’s also a good idea to use a cloud-based accounting software so that you can upload and organise your receipts with ease.

Go Paperless

Of course, you will need to keep hard copies of certain important documents but going as paperless as possible is a great way to stay organised and make accounting easier. There’s really no need to store everything in a shoebox anymore. 

Accounting software can do everything from generate invoices to storing receipts, eliminating your need for an overflowing filing cabinet. 

Electronic payments are also much faster to process than old-fashioned cheques, which is great news for your cash flow. 

Don’t Forget About Taxes

Employees with regular paychecks tend to spend a fairly minimal amount of time thinking about tax, but as a solopreneur you need to be much more proactive. For every invoice payment you receive, you need to set aside anywhere between 15-30% of that sum, depending on your annual earnings and business type. It’s important to be aware of this and budget accordingly so that you don’t receive a nasty surprise when the tax year ends. 

Summary 

Accounting and bookkeeping doesn’t have to be difficult. By staying organised, being proactive and taking a common-sense approach, you can overcome many of the common pitfalls experienced by new solopreneurs. 

Being proactive about expense tracking and invoice management will give you a huge leg-up. By separating your personal and business accounts and using accounting software, keeping your records in order becomes far easier. Trust us, this will save you many headaches and sleepless nights!

5 Ways to Grow Your Small Business Without Breaking the Bank

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Small business growth often requires hefty investment, but there are ways of growing and improving your enterprise without spending a huge chunk of cash. If you’re trying to build your business on a conservative budget, take a look at the following seven wallet-friendly ways to grow your small business. 

1. Analyse Your Marketing Efforts 

Fine-tuning your marketing efforts can help you use your marketing budget more wisely and achieve a better return on investment. Take a look at the marketing strategies you’re putting the most money into and work out which ones are driving sales. Tools like Google Analytics can help you figure out where your website traffic is coming from, allowing you to prune the practices that aren’t serving your business and focus on the ones that are achieving real results. Social media tools like HootSuite can also give you a clearer picture of the type of content that engages your audience the most. 

2. Fine-Tune Your Website

Many business owners build a website and then consider it a job done. However, your website should be regularly reviewed, optimised and updated to make sure that it’s delivering the best possible results for your business. 

Make sure that your contact information is correct and visible on each page. Strive to improve your loading times – for example, by compressing images – to boost your SEO score. Focus on local SEO strategies to find new customers in your local area and make sure that your site is content rich to attract a bigger audience. 

3. Take Advantage of Trends 

Show your customers that you’re an agile organisation by creating content, products and offers that reflect what is happening in your community and industry. For example, in recent years there has been a rise in micro influencer marketing and a focus on shopping locally due to the covid-19 pandemic. You could capitalise on this by collaborating with micro influencers in your local area, proving that you’re an on-trend business at the heart of the local community. 

4. Upgrade Your Sales Funnel with Content Marketing

If you generate a lot of leads but relatively few sales, then something is going wrong somewhere in your sales funnel. Either you’re not filling the top of the funnel with the right kind of leads, or you’re not nurturing them appropriately to convert them into paying customers. 

One key way to convert leads who are not yet ready to buy into paying customers is nurturing them through content marketing. A first-time visitor to your site will rarely make a purchase, so you need to give them a good reason to keep on coming back. When you share content to your audience every single day, you remain front of mind and build trust. Then, when a prospect becomes ready to buy, voila – you’re right in front of them. 

5. Understand Your Finances 

Knowledge, as they say, is power. Gaining a deeper understanding of your small business’ finances will empower you to make better decisions and grow your business more effectively. Using cloud accounting software such as Xero or Quickbooks can be enormously helpful here, as these programs create easy-to-understand reports and summaries. If you work with an accountant, be sure to consult with them regularly and don’t be afraid to ask questions – a great accountant is not just a number cruncher, but a partner and guide.

Summary 

Growing your business does not need to break the bank. Often, accelerating small business growth is a case of fine-tuning practices that are already in place and capitalising on the opportunities that are already in front of you. By working to improve your existing website and sales funnel, you can generate more high quality leads and nurture them to become paying customers via content marketing. It’s also important to remain agile and respond to local and market trends. Finally, it’s essential that you understand your finances so that you can make smart financial decisions that will really benefit your business growth. 

7 Most Common Money Mistakes for Start-ups to Avoid

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Smart financial management is essential for any business, no matter how big or small. However, it can be difficult to get things right, especially during the start-up stage. Poor financial planning is one of the most common reasons that start-ups fail, so the sooner you take ownership of your business’ financial health, the better. Dealing with your finances head-on from the get-go is the best way to set yourself up for lasting success. Careful planning can help you to avoid common money mistakes and shows potential investors that you’re serious. Here are the most common financial mistakes that start-ups make and how to avoid them.

1. Prioritising Instinct over Information

Whilst following your gut is generally a good principle, it’s a dangerous game to make assumptions about your finances. It’s vital that you meticulously track your revenue and expenses and closely monitor your cash flow. If a small mistake goes unnoticed for too long, it could prove very damaging for your business. During the start-up stage, using an Excel spreadsheet will suffice but be prepared to upgrade to bookkeeping software later on.

2. DIY Accounting

Managing your accounts by yourself will suffice for the initial setup of your business, but it’s wise to hire a professional accountant as early as possible. Juggling self-taught accounting with running a small business will eventually result in a backlog of errors, which can prove costly. Professional accounting services save time, money and stress, allowing you to focus on growth. You don’t need to hire a whole team. Start by outsourcing your taxes or setting up quarterly meetings with a financial consultant for help and advice.

3. Failing to Assign Project Budgets

Assigning a budget to a project prevents it from draining your finances should something go wrong. A clear budget will allow you to reassess your finances should the project require more money and make smart decisions that won’t damage your business.

4. Disorganized Files

The importance of balancing bank statements and keeping receipts in order cannot be overstated. Patchy bookkeeping can cause chaos for your business and result in a lot of trouble, not to mention wasted man hours trying to resolve the problem. Keeping all of your receipts and cross-referencing your accounts with your bank statements is vital for transparency and future success.

5.  Misunderstanding Your Target Market

In order for your business to be successful, you need to understand what your customers need. Knowing your target market helps you to reach them, as well as how to appropriately price your products and services. Here are some questions to consider:

What is your market position?

What need do you fulfil for your customers?

How much value do your products or services provide?

Who is your competition – and what makes you stand out?

Miscalculating prices can prove to be a grave error for a small business, but knowing your market well will help you to figure things out.

6.  Hiring Quantity over Quality

Over-hiring is an expensive mistake to make. Hiring employees is one of the most costly parts of running a business, so going overboard is a huge waste of money. It can also damage staff morale and productivity, and lay-offs further down the line will only amplify the problem.

Bad hires are another threat to a small business. Hiring the wrong employee can create an imbalance within the company culture. In turn, this can negatively impact other staff and even damage your business’ reputation. Don’t rush the hiring process. Taking extra care to avoid mistakes can save a lot of trouble in the long run.

7. Miscalculating Expenses

In order to keep your business afloat, you need to know exactly how much cash your business burns each month. Keeping a meticulous record of your expenses allows you to understand where your money is going, and how much you’ll need to survive. Underestimating your cash burn can land your business in hot water, so create a projection of your monthly expenditure and be sure to monitor it closely, making adjustments whenever necessary.

A successful business needs a strong financial foundation, so keep these mistakes in mind. No business is invincible and it really does pay to be cautious and always stay one step ahead.

If you want help to ensure that your new business gets off to the best possible start click the link below to arrange your free discovery call.

www.sunnysideaccountancy.co.uk/contact/

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