Business can be one of the most rewarding ways of meeting your personal and financial goals for a secure and fulfilling future. However, along the way, there are many small business challenges that you will face, so is it time to be pre-prepared for the journey ahead.
To help you to prepare for that journey and to overcome some of those small business challenges, we’ve compiled a useful list of ways to help you navigate your path.
- You need the right accountant or business consultant
It’s not enough to just have someone who knows tax and structures. You need someone in your corner that speaks your language and gets you and your business. This trusted advisor should be someone that supports your business journey and adds value along the way. A supportive business partner can be invaluable on a business journey.
- Utilise accounting software
We recently ran a seminar about bookwork and the keys to success. Getting a handle on your bookwork and put processes in place around the following:
- Payment of expenses
- Firm debt collection
By doing so you will be geared up for managing cash flow more successfully. Managing your books with paper or excel spreadsheet is adequate if what you’re doing is just a hobby. However, if you are serious about your direction, then you’d be naïve not to automate your processes early. Good accounting software will remove a mountain of unwanted admin and accounts time allowing you to focus on running your business. In addition, it will alleviate pressure when you find you’re too busy to put this in place later.
- Know your business structure and your options for growth
Many people begin in business as a sole trader. Whilst this is an easy and low cost structure, it does have its risks. It’s always good to know your options and understand at which stage it may be time to grow into a structure that will give your assets and business more protection.
- Don’t spend money unnecessarily
It’s easy to get caught up with all the things your business might need in the future. It’s good practice to only purchase what your current needs dictate to ensure you get your business up and running and customer through the door. Ensure you evaluate your decisions before making purchases. It’s too easy for people to get into cash flow problems before they’ve even begun by overspending/ financing unnecessary items in the beginning.
- Put money aside for tax
So many businesses get caught out after the end of the financial year when they do their tax returns. This is often where we see most cash flow problems develop. It is good to get into the habit of putting money aside each week/month for tax so you don’t get caught out.
- Know your breakeven point
This is a crucial number that you MUST know if you are in business. This is the amount of sales your business needs as a minimum to keep the business going. We are surprised at how many businesses, new and old, don’t know how many sales they need just to keep their business afloat. Knowing this number means you have a goal to achieve and you can re-evaluate more regularly if you are not meeting it.
Implementing these helpful tips will help you overcome some of the small business challenges you may have to or already be facing as a business owner. Make your business journey easier by working smarter not harder.