Coping with the costs of running a business
In the latest UK200Group blog post Richard Dilley ACA FCCA, Partner at George Hay Chartered Accountants, discusses strategies to cope with increasing costs
The cost of running a small business seems always to be increasing and as costs mount, some struggle to ‘keep up’.
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 these pressures.
Here are a few things that, we would suggest, make for a good place to start…
Understand your accounts - Understanding what is coming in and going out of your business, at the very least, is key to running it effectively. When it comes to extracting and interpreting more detailed information, this is where many businesses benefit from involving a team of professionals to take care of the number crunching for them. Small businesses will have a better chance of surviving and succeeding in the long-term, armed with valuable insight.
Make the most of tax reliefs - Tax is a significant outlay for many businesses, so making the most of tax reliefs is key to compliantly reducing your liabilities. It can be difficult to identify which reliefs you’re eligible for, so engaging an experienced tax adviser is often beneficial.
Don’t be afraid to invest in your business - Waning confidence in the economy and worries about the future can put many small businesses off investing money back into their business. Risk assessment is extremely important, however, if you have the means to do so, you shouldn’t be afraid to utilise some of your profits to grow your business and remain competitive.
Switch to digital - Making Tax Digital aside, the benefits to your business of embracing digital extend way beyond tax. As time goes on, technology is only going to continue to advance. In essence, this will make doing business easier for those willing to engage with it.
Outsourcing - Outsourcing can be a great way to streamline operations that are eating up your time, money and resources (perhaps without you even realising it).
Plan, plan, plan - We know we talk about planning a lot, but it’s because it’s so important. Without planning, there is no direction, no way of benchmarking your performance and no way of knowing where you might end up. Proactive planning can help you to better protect your finances, it’s a fact.
Those businesses which dedicate little or no time to understanding their income and outgoings, or to managing their cashflow, can easily succumb to external pressures and find themselves struggling.
The strategies we’ve discussed above can indeed help you to begin 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, visit www.georgehay.co.uk
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