According to Government figures, there has been a net increase of 146,000 businesses in the past year, taking into account all start-ups, closures, takeovers and mergers. It means more businesses have started than closed.
The Business Population Estimates also show the number of businesses that employ people has grown for the second year running, with 35,000 more at the start of 2015 than in 2014.
Small businesses continue to make up 99.3% of all businesses and generate over £1 trillion turnover for the UK’s economy.
Business Accountants (Association of UK Accountants) are Chartered Management Accountants (CIMA) and when you start your new business they are will tell you:
- Choose the right business structure for your business – most businesses start out as sole traders but once they start making profits convert to limited companies, this is because sole traders pay more tax than company structures
- Choose the best VAT Scheme you might be better off with Flat Rate or Cash Accounting
- Choose the most suitable accounting software
- Don’t mix up Business and Personal Expenses – always have separate bank accounts
- Reconcile your Bank Transactions regularly – its easy to forget what you have spent checking the bank account keeps you in control
- Understand and manage your cash cycle – how long does it take to get paid and what credit terms do you suppliers give you?
- Manage customer payments and make it easy to pay your invoices
- Understand and Comply with rules like National Minimum Wage and Holiday Pay
- Understand and set money aside for Tax, don’t be late paying your tax
- Have a Business Plan and Forecast it will improve your chance of success