The General Election, Brexit, Falling UK Sterling and lower consumer confidence across the UK has made a perfect storm of negativity with small to medium sized businesses seeing lowering sales and profit in last couple of months.
We've seen this is with many of our clients. (Why is your current accountant not telling you this?) And this worrying trend may last longer as the summer months arrive and peoples' focus switches to holiday and spending less money as they keep hearing about inflation and other scary words they don't understand. So with that in mind how does a small / medium sized business keep growing or, at the very least, keep the money coming same as previously? Well at Tax Affinity Accountants we've been helping business through many recessions / downturns and believe in giving useful real time support and advice to small and medium sized businesses. And with this in mind the tried and tested list below will help: 1. Go where the money is - be adaptable and look to see what is selling and sell more of that and stock less that which is in less demand. If its a different product or service that you don't offer consider adding this. 2. Give the customer what they want not what you want - listen to them and understand them properly and give them what they are looking for. Your customer will tell you how to keep things going in your business. Ask them, remember you have two ears and one mouth, use them in that proportion. 3. Make an offer they cant refuse - when things are difficult for a client make sure you have offers and special deals like the supermarket and larger traders do to entice them. This may mean offer something at a low price with the plan to sell another product/service that compliments that item and will make more profit. 4. Keep an eye on competition - make sure your business is not lagging behind on the four P's of the marketing mix - Product, Price, Promotion, Place. All four need to be excellent to ensure growth in a downturn. 5. Give away stuff to entice people to keep visiting - This doesn't mean give everything away at a knock down price, but more specifically could mean a good chance to clear out old stock items and have more space by getting rid of it at cost price. The customers get a good deal and you keep the cash-flow coming in. 6. Don't use bad economic conditions as an excuse - stay focused and think positive, don't listen to negative sources of information, look at the positive sources as well. Many large retailers have a positive outlook, its just that media outlets like to dwell on negativity as bad news sells better than good. Compare your business to the bigger companies and see what they are doing and what you can do as well. The Director / CEO that thinks and plans positively is the one that drive their business forward. By Anni Khan at Tax Affinity Accountants Tax Affinity Accountants are experts in Tax and Accountancy. Based in Worcester Park and Kingston upon Thames they are considered in the Industry to be expert accountants and tax advisors for small businesses. Helping and supporting contractors and self employed people throughout the UK, they regularly help clients grow their business providing tailored advice. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.
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Growth Vouchers Scheme can be invaluable for business to gain the advice and support needed to expand and grow their profits and business.
This government programme is basically designed to help small businesses get strategic business advice on:
The voucher can pay for up to half of the cost of the advice from a recognised business adviser such as Tax Affinity Accountants can serve as a real helping hand to boost your business. It is structured in such a way that the supplier will claim this fee from the programme making it easier for the business owner to quickly get the support and advice he/she needs. There are some simple eligibility criteria as below: Your business must:
And then you will need the following things to complete your application, as available by your accountant:
So how does it work? Either speak to your chosen adviser and they will make the necessary arrangements for you or sign up on the government’s growth voucher website (open until March 2015). Once you have received the voucher, simply use it for the advice and support. The growth voucher scheme has been running for few months now and it is growing in success. However, be careful because the scheme is not intended for company owners seeking to subsidise practical guidance on how to engage in precise tasks relating to running a business. It’s for tactical advice that will lead to growth of the businesses. The quickest way to get support for the is to call 0800 043 4051 or visit www.taxaffinity.com and speak to one of our experienced business adviser's and growth coaches at Tax Affinity Accountants. By Tahir Malik at Tax Affinity Accountants Tax Affinity Accountants are experts in business coaching and are based in Kingston upon Thames they are considered to be experts in their field. Helping and supporting businesses and individuals throughout the UK. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends. The bridge between having a good business idea and implementing such idea into a business model can be wide and daunting. Getting the necessary funding to kick start your business can be a difficult process and different sources of finance may not be appropriate for everyone due to varying circumstances.
Whether you require investment for start-up capital or are looking to expand your business, the cost can be astronomically different depending on a few variables. Here is a list of things to consider when looking for a source of funding for your business: The “Right” Amount There are a few questions that should instantly appear on the forefront of your mind when you are seeking finance.
Doing your homework from the start will help you avoid many future problems. A shortfall in funding may jeopardise your business in its entirety, you may miss out on that explosive launch you was hoping for or realise that a particular project didn’t produce the desired results because you ran out of cash. There’s a subtle understanding in business that goes like this; “you need to spend money to make money”. Making big changes in your business requires money and not everyone has that money in their bank accounts. However, funding must not only be sufficient but efficient as well. There’s no point asking for more than you need, it will just result in more interest and a larger repayment towards the end. Plan out your budget by listing a breakdown of the different components the funding is used for. You may spot areas in which you can forgo and others that you may have missed out. And once you get the funding, you’ll know exactly what to do with it. Timing is Key Timing is essential in many aspects of life and its no different in regards to funding. Having a realistic time horizon to pay off your borrowings can make repayments easier and more manageable. Pacing your repayments can avoid interest payments from siphoning your cash flow. Tip: If your business is performing better than expected, think about repaying back the debt earlier to decrease the amount of interest accumulating. The Correct Choice Here comes the most difficult part when seeking for funds. How do I choose between so many options? Well unluckily for most, they don’t have as much choice as they think they do when it comes to the selection of finance. The most common for small businesses to get funding is through their own savings. This is, by far, the cheapest source of funding and the only opportunity cost associated is that you lose out on the interest on your savings which quite frankly is nothing compared to the potential interest payments you make for other sources of finance. However, a lot of the time, the money is not enough to fuel the business which leads to people opting for the next best choice; a bank loan. This may be the most appropriate option for many individuals seeking funding as terms can be flexible and mutually agreed upon by both parties. Tip: Try browsing through the different types of loans you can apply for, you may believe that there is some standard rate banks tend to charge for certain loans but be very surprised that the conditions of such loans can be as different as night and day. Take every percentage point at face value; there may not be much difference between 7% and 8% but over the long term you’ll end paying back significantly more in aggregate. Borrowing money through a loan or equity share from family and friends can be a good source of financial investment. Loans offered in this fashion tend to have a low interest rate compared to traditional loans and possess more lenient terms. Offering a piece of your business via equity distribution can motivate your family and friends to help grow your business. Be warned though that any business problems don’t end up trickling down to family matters. Also, make sure any loan agreement is in writing just to avoid any legal problems that may arise in the future. Another alternative of funding is through an outside investor. This is usually not a loan but an equity investment. This means that the investor becomes a shareholder in the business and is entitled to a percentage of the business profits (depending on his/her equity share percentage). Furthermore, the investor may have some degree of control in your business. Depending on the investor, this could be advantageous or disadvantageous. The outside investor could bring new ideas and contacts into the business which would help accelerate the growth of the business. On the contrast, the investor could be in disagreement with any business decisions made and hinder the progress of the business. It is up to the business owner to make sure the interests of both parties are aligned. One thing to note is that debts can be paid off but equity is fixed for the lifetime of the business which could result in equity being much more expensive if the business grows rapidly. At Tax Affinity Accountants we provide free tailored advice to help grow our clients business. By Wilson Law at Tax Affinity Accountants. Tax Affinity Accountants are experts in Tax and Accountancy. Based in Kingston upon Thames they are considered to be small business experts helping and supporting business in the UK. They regularly help new business start up and provide valuable support for new businesses. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends. Start Your Own Business in 2014- Top Tips
With the jobs market as saturated as ever, 2014 may be the year to cut loose and set up your own business. Figures from ‘Start Up Britain’ report that over 500,000 new businesses were incorporated in the UK in 2013, employing approximately 7 million people. Here are some tips to give your new business the highest chances of success: 1. Business Plan- One of the keys to starting up a strong new business venture is to ensure you have a well-structured, yet flexible business plan. By planning thoroughly your business model and strategy, you improve your chances of eliminating costly mistakes. Take time to assess the market and your competitors and ensure you have a USP (unique selling point) to differentiate your product/services. Have a strong grasp of sales forecasts, costing and investments so you can track the progress of your business and also attract funding from lenders. 2. Break-even Analysis- This is very useful tool to ensure you don’t jump into a new business venture without properly assessing the risks. By working backwards and summing all your fixed costs, you can work out approximately how many units you will need to sell at a given price in order to break even. This allows a straightforward check to ensure the business is viable. A simple formula for this can be calculated as follows: Break-even point = fixed costs/ (unit price – variable costs) 3. Know your product (and its competitors) - Do your homework. Make sure you have fully researched the competition. What are their strengths/weaknesses? Know your customer and who you are targeting in order to tailor your product/service to the clients’ needs. Also ensure you have a competitive pricing strategy. 4. Marketing- Although some forms of marketing can be expensive, it is highly important to increase brand awareness and start attracting a wider customer base. Use free marketing tools such as social media platforms like Facebook and Twitter to spread the word. Even basic techniques such as asking customers to tell their friends and family can be highly effective. 5. Ensure the Right Image- The perception of your business is extremely important to its success. Ensure a professional image by creating a clean, easy-to-use website and business cards. You should also consider using a 0800 number which will be free for customers to call from landlines. This is a simple way to make the business more customer-friendly. 6. Home Business- Consider setting up your business from home initially. There are a range of benefits to this. Aside from extra flexibility, you will also avoid the costs of renting an office space, utility bills and other expensive bills. Furthermore, you can claim certain household expenditure as tax deductible. A portion of telephone, internet and utility bills can be deducted from your tax liability. 7. Build the right team- Going it alone in business can be highly stressful so it is imperative you build a strong team around you. Depending on your circumstances, you may also benefit from starting up with a partner in order to increase ideas and share the load. Look for someone with the same aspirations but with a different skill set that can complement yours. By Thomas Hoadley at Tax Affinity. Tax Affinity Accountants are experts in Tax and Accountancy. Based in Kingston upon Thames they are considered to be small business experts helping and supporting business in the UK. They regularly help new business start up and provide valuable support for new businesses. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends. Keep your Business Cash Flow in check.
The success of your business is dependent on the way you manage the cash flow of the business. A business could be highly profitable but still default if it does not meet its short term debts. There may be times when it is unavoidable to experience cash flow reductions, such as spending your reserved cash on new capital or suffering from unexpected weather conditions that forces the business to close for a while. However, it is definitely unhealthy for the business to suffer cash flow problems on a regular basis and it may cause harm for the business in the long term. Good cash flow management and contingency planning will allow majority of these problems to vanish. Here are a few ideas on how you can improve your cash flow cycle. Operating at a Loss Many new businesses may operate at a loss in their first few years of trading. The costs of starting up a business normally exceed profits. However, if the business is over 3 years old and still making a loss, it may be of your best interest to carefully monitor your expenditure to ensure that money is not spent needlessly or on the wrong things. Having a Clear System A good system can ease out any fluctuations in your cash flow cycle. For example, a service provider can think about taking an upfront deposit of any project it undertakes or charging on a completion basis. Not only will it keep money available for short term use but allows more effective tax planning as profits is smoothed over periods. Keeping Up-to-Date It is good practice to review your credit control on a specific day every week. Keeping a routine check-up allows you to clearly identify what has been paid, what is pending and what is late. Paying your Bills by their Due Date You should always pay your bills on time. However, it is better to pay your bills as close to the due date as possible. It is advisable to pay around 3-4 days before the due date so that any issues arising in regards to the payment can be rectified in time. Giving Customer Incentives for Early Payment Offering discounts to new customers to encourage prompt payment can be beneficial for your company cash flow. Bear in mind that discounts should not be too deep otherwise it will eat into your profit margins. You can also offer discounts to recurring customers that make large payments in order to reduce the risk of cash flow problems arising from delayed payments. Penalties for the Late Often people do not react to rewards quite the way they react to punishments. Giving customers a penalty fine for any late payments will likely grab their attention and prioritise you on their payment list. Don’t be too harsh on late payments though as others may have temporary issues with their cash flows and imposing a penalty may end up hurting business relations. Saving for a Rainy Day Unexpected occurrences and accidents can happen out of the blue. Make sure you put aside some reserves for one of those “emergency” situations. Not all situations can be accounted for but having enough funds to deal with the likely ones can let you breathe a bit easier. Seeking Professional Help Many businesses struggle to keep their finances in check. The unfamiliarity of running a business and being unable to cope with numbers can be a grinding headache for business owners. An easy way to relieve the ongoing stress is by hiring an expert bookkeeper like Tax Affinity. They can advise you on managing your costs, list strategies to improve your revenue and also handle your tax affairs all. You can now focus on driving your business forward rather than being worried about the upcoming loan repayment. Take note on how the company finances are handled so that you are able to step in if needed. By Wilson Law at Tax Affinity. Tax Affinity Accountants are considered in the market to be experts in Tax and Accountancy in the UK. Based in Kingston upon Thames they have clients are right across the UK as well as Europe, Middle East and North America. For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends. |
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