There will always be costs associated with running a business; but, when they seem only to increase, some businesses can struggle to ‘keep up’ financially.
Late payments, rising business rates and employment costs, interest rates, Making Tax Digital (MTD), Brexit-related uncertainty and declining sales are just a handful of the challenges that businesses are currently facing.
Unfortunately, these are things that are unlikely to be resolved over-night and so businesses should consider what they can do to mitigate some of these pressures.
Here are a few things that, we would suggest, make for a good place to start…
- Understand what money is coming in and going out of your business. This knowledge will help you to run your business effectively and will improve your chances of survival and success, in the long-term.
- Tax is a significant outlay for many businesses, so consider whether you are making the most of tax reliefs that are available to you.
- Waning confidence in the economy and worries about the future may be deterring you from investing profits back into your business. It is not wrong to be wary but, if you have the means to do so and you have assessed any risk, don’t be afraid to go for growth!
- Embrace technology! Those willing to engage will undoubtedly find it easier to do business going forward.
- Monitor your debtors, make contact with them regularly and if they are having difficulty making payment, discuss solutions sooner rather than later to limit the impact upon your ability to meet financial obligations.
- Know what you are selling, whether product or service, and be aware of the income that it is generating.
- Consider outsourcing as a means of streamlining your operation.
- Take planning seriously and be proactive; doing so can help you to better protect your finances.
- Consider whether your financial requirements and the funding you have in place are properly aligned. If they are at odds, it may be time for a re-think.
Those businesses which dedicate little or no time to understanding their income and outgoings, or to managing their cashflow, can easily find themselves floundering. The strategies we’ve discussed above can indeed help you to cope with increasing costs; however, before making any long-term business decisions, it is wise to take professional advice.
To find out how we can help your small business, call us today on 01462 708810.