First, you should create a business plan.
Approximately a third of all SME’s in the UK don’t have a Business Plan, that’s about 1.5m businesses, here are some reasons why you should prepare one….
- Research by Exact Software shows that SME’s with Business Plans make 20% more profit
- Having a business plan doubles your chances of increasing profits, increasing revenue, attracting new clients
- A well-researched business plan which includes the right figures and realistic forecasts will reassure potential investors you are a sensible investment opportunity
- A Business Plan will help you set out and achieve your goals
- It will help you set goals for your managers and staff
- The Business Plan will help you plan your cash flow and forecast Capital Expenditure
- A Business Plan will help you secure Business Finance and Loans
- You can plan your succession strategy or prepare the business for sale
- A Business Plan tests the feasibility of your business idea
- It will help you plan for the recruitment of Staff
Your responsibilities
You’re responsible for:
- keeping records of your business’s sales and expenses
- sending a Self Assessment tax return every year
- paying Income Tax on your profits and Class 2 and Class 4 National Insurance – use HMRC’s calculator to help you budget for this
- your business debts
- bills for anything you buy for your business
- registering for VAT if your turnover reaches the VAT threshold
- registering with the Construction Industry Scheme (CIS) if you’re a contractor or sub-contractor in the construction industry
Ask an Accountant for Help with…
- 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
