Often the Christmas and New Year period is when many small business owners have more time on their hands to reflect on the year gone by and to start thinking about the year ahead. For those of you who are mulling over financial goals for the forthcoming year, I have come up with three key areas that you could gain from focusing on in the New Year.
1. Understanding your figures
Do you know what money you have coming in every month?
Do you know how much money you have going out of your business each month?
How much are your fixed costs each month?
Who were your best and worst paying customers?
Do you know what to do if you are not paid?
As a small business owner it is vital that you understand how your business is performing. Understanding your numbers can help you plan and make well informed business decisions.
2. Adopt an online bookkeeping solution
A very common misconception is that accounting software is only for Accountants and that it is expensive. Don’t be put off by all the “cloud” jargon surrounding online software. Many of these newer packages are written with the small business owner in mind, come free of accountancy jargon and are relatively simple and intuitive to use. Many of the online packages now available not only save you accountancy fees and time but can also allow small business owners to be much more in tune with their financial information.
3. Plan ahead
It is so easy to get carried away with the more exciting aspects of running your own business that the task of preparing financial goals and forecasts is often overlooked. Whatever stage or size your business is it is essential to Plan. Planning will give you the opportunity to ask the right questions of your business to avoid unnecessary costs and to charge the right price.
Prepare a plan of business goals and update these regularly. Prepare profit and cash-flow forecasts. If you don’t forecast these you are unlikely to control your cash and business properly. If you are doing all the above then you are well on your way to putting yourself in the best possible position to take your business forward in the right direction for 2015. If you are not doing all the above don’t panic – I frequently get calls from the most established and successful of businesses who after many years have recognised that they need help in these areas.
The most important thing is to recognise the problem and have the mind set to make the change. If you require any help do get in touch and remember that we offer a free no obligation consultation.
The Winchester Bookkeeping Company http://www.winchesterbookkeeping.co.uk Tel: 07596 516670