16 Dec 2023
Business growth presents a huge challenge for small business owners. Sustainable growth requires careful forethought and preparation; you can’t build a solid house on shaky foundations. It’s easy to get swept up in all the excitement that accompanies business growth, but remember to take the time to prepare and organise your business to ensure that your growth is sustainable. The last thing you want to do is to end up damaging the business you have worked so hard to build. Let’s take a look at how to prepare your small business for sustainable growth.
Create the Right Team
As your business grows, the demands upon your team will change significantly. Your team may be working well right now, but you need to consider how much extra support they will need as your business grows.
When hiring, don’t just look for skills and talent. It’s important to take an applicant’s mindset into consideration, too. You can provide training to bring an employee up to scratch, but it’s very difficult to reset a negative attitude.
As your team grows bigger, management will become more complex, too. You will need to consider implementing new systems and standard operating procedures to ensure that your team can continue to function at its best as your business expands.
Update Your Infrastructure
You will need to scale your IT infrastructure in line with your business. Of course, this can be a very expensive process and may require you to hire new staff, which is a big drain on your resources.
Often, however, you can find cloud services to support your essential business functions, such as CRM software, HR management programs and email services. Cloud services are easily scalable and can help you to avoid many infrastructure-related growing pains as your business evolves.
Manage Your Books
Financing planning is a crucial part of planning for business growth, but before you can make a plan you need to get clear on where you are right now. This means updating your books and making sure that all of your records are impeccable – a task which many business owners tend to let slip.
Build Credit
You should always aim to establish a strong payment history with lenders to enable you to borrow more in the future. Cultivating a good relationship now will really pay off further down the line. It’s also important to pay your bills on time and maintain separate business and personal bank accounts to prove to lenders that you are fiscally responsible.
It’s always wisest to borrow when the going is good. You should arrange some credit now so that you can access it as and when you need it, rather than trying to secure funds when you’re in a difficult spot. Building credit before you need it puts you in a better position to shop around with creditors and negotiate better interest rates, too.
A good way to do this is to take out a line of credit, which is a pre-set borrowing limit. It is there for you when you need it, but you won’t pay interest until you actually borrow. You can then pay it back in increments over a set period of time, much like a traditional bank loan.
For more flexible options, consider arranging an overdraft and business credit card to smooth over short-term cash flow issues. However, bear in mind that these credit options are not suitable for long-term borrowing.
Summary
When anticipating a period of business growth, it’s important to ensure that your team is primed to handle growth and that your IT infrastructure can support the increased demands that it will incur. You should also ensure that you have access to plenty of credit and that your records are in good order so that you are able to make the right financial decisions at the right time and protect your cash reserves. Business growth certainly comes with its fair share of challenges, but good preparation is the key to profitable and sustainable growth.
If you’d like to speak to us about how we can support you with your accounting needs, book a free consultation here.
8 Aug 2023
Small businesses often put off hiring an accountant until they’ve grown bigger, but that’s a mistake that can actually delay growth. The services of an accountant extend beyond simply minimizing your tax bill, although that’s an undeniably valuable advantage. In addition to saving you time and money, a good accountant helps you to manage your cash flow, plan ahead, make smart decisions and reduce any risks to the financial health of your business. Here’s why investing in a quality accountant beats the DIY route every time.
1. Save Money On Your Tax Return
Let’s start with the most obvious advantage of hiring an accountant: to save money in taxes. Filing your taxes is notoriously complex and even a small, innocent mistake can result in a hefty fine. Chartered accountants train for years in order to be able to complete this process accurately, so doing your own return puts you at risk of making expensive mistakes.
Furthermore, a qualified accountant will have up-to-date knowledge of tax breaks, loopholes and business incentives to save you a sizable sum of money that you can re-invest in scaling up. If you do your own accounting or go with a very cheap firm, you’re unlikely to benefit from these savings.
2. Free Up Valuable Time
In addition to saving you money, an accountant will also save you a lot of time that you can put to far better use. As a small business owner, it’s vital that you keep accurate financial records and stay on top of your accountants. However, it’s equally true that your efforts are most valuable when concentrated on your area of expertise. Hiring an accountant allows you to ensure that your accounts are being managed well whilst allowing you to focus on growing your business.
3. Startup Advice
As mentioned, many small business owners are reluctant to hire an accountant in the beginning stages. However, an experienced accountant will be able to provide valuable advice during the startup stage that can accelerate your growth on areas such as:
- Key financial risks
- Budgeting
- Financial forecasting
- Growth
- Funding
- Tax incentives
- Overall financial health
Hiring an accountant from the very beginning can help you build a solid financial foundation to ensure that your business is around for many years to come. They can advise you on which legal structure to choose and offer unbiased, constructive criticism of your business plan. It’s also worth noting that an accountant-approved business plan is more attractive to prospective investors.
4. Manage Cash Flow
Managing your cash flow well is essential to the growth of your business. Poor cash flow management is a serious threat to even the most profitable businesses, so it’s very important to get it right. Accountants are experienced in managing cash flow and can produce regular forecasts to ensure that you always have enough funds to continue operations as you scale up and market conditions change.
5. Growth Management
A quality accountant can help to fund and manage the growth of your business. Firstly, an experienced accountant will help you to identify sources of funding and present your case to potential investors. Additionally, they can also help you manage sudden growth spurts and ensure that they don’t overwhelm you and damage the financial health of your business, as is often the case.
6. Market Knowledge
It pays to hire an experienced accountant who knows exactly where your company is positioned in relation to your market sector. You can leverage this knowledge to create your unique selling point, price your services appropriately and gain a competitive advantage. In short, an experienced accountant allows you to benchmark your company which is incredibly useful for growth.
An Accountant Is An Investment
It pays to hire a high quality, proactive accountant. Whilst there are many cheap services out there, you’ll see the greatest return on investment from hiring an accountant who has the time, knowledge and experience to grow your business. A good accountant will do everything they can to not only save you money on taxes but to provide valuable advice, manage your cash flow and secure the financial health of your business for years to come.
Did you know we’ve also got a free downloadable eBook dedicated to the most common profit draining mistakes made by small businesses. Check it out here.
Book a free consultation here, to learn more about our accounting services.
7 Jun 2023
Scaling your small business is incredibly exciting, but there’s a lot to think about. It’s important to have solid rules and guidelines in place, and a clear plan to follow. If you’re ready to scale up your small business then read on for seven top tips to help you do it.
1) Hold Onto Your Values
Your values should always be at the heart of your business, so be careful not to lose sight of them as you scale up. After all, these values have been instrumental in helping you achieve success so far, so don’t sacrifice them as your company grows.
2) Identify Your Barriers
What is getting in the way of your growth? What could go wrong as you scale up?
Take a step back, put your emotions to one side and take an honest, objective look at your business. Do you lack funding? Are you experiencing cash flow issues? Do you have a high staff turnover rate? Are there problems with your current premises?
Identifying your barriers to growth is the first step to overcoming them so don’t be afraid to take a long, hard look at your business. Every business has its weaknesses, so don’t be disheartened by yours but instead view them as an opportunity to improve.
3) Run the Business You Want, Not the Business You Have
In order to scale up successfully, you need to bridge the gap between where you currently are and where you want to be. What works for you right now might break as you begin to grow, so it’s important to put systems and SOPs in place that will continue to work seamlessly as you scale up. Take a look at your cash flow, team, IT systems, workflows and supply chain to see what is going to creak or even break as your business expands, and prepare accordingly.
4) Build the Right Team
Leading on from the previous point, building a strong team of employees is an essential part of scaling your small business. You will need to take on more staff as you grow and ensure that they share your values. When hiring, place special importance on attitude and willingness to learn; you can teach an employee new skills but it’s very difficult to fix a negative mindset.
Staff morale is essential to productivity and a low turnover rate, so it’s in your best interests to create a supportive company culture that helps each team member reach their potential. Remember that making your staff feel seen, heard and appreciated goes a lot further than fancy merchandise or an extravagant Christmas party ever will.
5) Learn from the Competition
Study your competitors who have successfully scaled up – how did they do it? What worked well for them, and what could they have done better? How did they change as they grew? Your competitors constitute a valuable learning opportunity, particularly when it comes to business growth.
6) Stay Focused on Customer Service
The last thing you want to do when scaling up is antagonise your customers. You must remain consistent with the quality of your customer service; scaling up will do more harm than good if it causes all of your customers to flock elsewhere.
Of course, mistakes do happen but it’s important to rectify them as soon as possible, maintain honest communication with your customers and make them feel valued to keep them coming back.
7) Monitor Your Cash Flow
Many of the biggest challenges businesses face during the scale-up phase are cash flow related. Whilst you do have to spend in order to grow, it’s important to keep a close eye on your cash flow throughout this process so that you know where every penny is going. This way, you can identify and solve any issues as soon as they arise, and see off potential threats before they come to fruition. It’s also important to prepare an adequate cash reserve for emergencies and unforeseen costs so that bumps in the road don’t cause a total breakdown.
Summary
Whilst the scale-up phase can be challenging for small business owners, it’s also exciting and provides a great opportunity to build an even better business. Whilst we can’t promise that employing the above seven tips will make scaling your business 100% worry free, they can make the process significantly smoother and easier.
Book a free consultation here, to learn more about how our bookkeeping services can support you.
18 May 2023
Business development is a critical part of any company, but it can also be very tricky. There are many things that can go wrong, and if you’re not careful, you can end up sabotaging your entire business. In this blog post, we’ll discuss six common business development mistakes to avoid so that you can make sure that you don’t fall into these traps.
#1 – Confusing Sales with Business Development
One of the most common mistakes that companies make is confusing sales with business development. They are two very different things, and they require different skill sets. Sales is about generating revenue through direct transactions with customers. Business development, on the other hand, is about creating long-term value for the company through strategic partnerships and relationships.
If you want to be successful in business development, you need to focus on building relationships and creating value for your company, rather than simply trying to make a quick sale.
#2 – Not Focusing on Your Clients/Customers
Another common mistake is failing to focus on your clients or customers. It’s easy to get caught up in the day-to-day operations of your business and forget about the people who are actually using your products or services. But if you want to be successful in business development, you need to keep your clients and customers at the forefront of your mind. After all, without them, you don’t have a business.
Think about what they need and want, and how you can help them. Build strong relationships with them, and always keep their best interests in mind.
By focusing on your clients and customers, you’ll be able to create much more value for your company in the long run.
#3 – Talking Too Much and Listening Too Little
In a similar vein, many companies make the mistake of talking too much and listening too little. When you’re trying to build relationships and create value, it’s important to remember that communication is a two-way street. You need to listen as much as you talk.
Make sure that you’re really hearing what the other person is saying, and take the time to understand their needs and wants. Only then will you be able to create something that truly meets their needs.
If you want to be successful in business development, start by learning to listen.
#4 – Confusing Busy-ness and Productivity
Another common mistake is confusing business with productivity. Just because you’re busy doesn’t mean that you’re being productive. In fact, you could be doing a lot of things that aren’t actually helpful to your business.
To be truly productive, you need to focus on activities that will create value for your company. That means identifying and pursuing opportunities, developing relationships, and creating new products or services.
If you want to be successful in business development, focus on being productive, not just busy.
#5 – Failing to Identify Your Most Profitable Clients
The 80/20 rule says that 80% of your business will come from 20% of your clients. So, it’s important to identify who your most profitable clients are and focus on them.
Many companies make the mistake of chasing after any and every client, regardless of whether they’re actually a good fit. But if you want to be successful in business development, you need to be more selective.
Identify your ideal clients and focus your efforts on pursuing them. By doing so, you’ll be able to create more value for your company in the long run.
#6 – Failing to Prepare
Last but not least, many companies make the mistake of failing to prepare. Business development is all about creating opportunities and then capitalizing on them. But if you’re not prepared, you won’t be able to take advantage of those opportunities.
Make sure that you have a solid plan in place before you start pursuing any new opportunities. It’s important to consult with experts, such as accountants and lawyers, do your research, and make sure that you’re prepared for anything that comes your way.
If you want to be successful in business development, always remember to prepare before taking any action.
Final Thoughts
In order to be successful in business development, it’s important to avoid common mistakes. Focusing on your clients and customers, listening more than you talk, preparing for any opportunity that comes your way – these are all essential pieces of the puzzle. By keeping these tips in mind, you’ll be well on your way to success.
Book a free consultation here, to discuss your needs and how we can help you avoid financial mistakes.
We’ve also got a free downloadable eBook dedicated to the most common profit draining mistakes made by small businesses. Check it out here.
20 Apr 2023
Growing your small business is no easy feat, but great accounting practices can make a world of difference. Robust financial management is the key to building a thriving business and ensuring its long-term success.
As a small business owner, you need to be on top of your finances at all times. This can be a daunting task, but there are some useful accounting tips that can help you stay on track.
1. Keep accurate records
Let’s start with the basics: accurate record keeping is absolutely essential for any business, large or small. Good accounting practices require that you track all of your income and expenses so that you can get a clear picture of your financial situation. This will allow you to make informed decisions about where to allocate your resources and how to grow your business.
2. Write a detailed budget
A budget is a critical tool for any business, and it’s especially important for small businesses. A well-crafted budget will help you keep track of your income and provide a roadmap for your spending. It can help you to avoid overspending and ensure that you are making the most efficient use of your resources.
3. Use accounting software
There is a wide range of accounting software available on the market, and it can be a valuable asset for a small business. This type of software can automate many of the tedious tasks associated with bookkeeping, freeing up your time to focus on other aspects of your business.
Using accounting software will also help you to get more out of your relationship with your accountant because they will be able to access your financial information more easily and have more time for analysis and advice.
4. Stay on top of invoicing
Invoicing is a crucial part of running a small business, but it can be easy to let this important task slip through the cracks. It’s important to stay on top of your invoicing so that you can keep cash flowing into your business.
One way to stay on top of your invoicing is to use invoicing software. This type of software can automate many of the tasks associated with invoicing, making it easier to stay on top of this important task. The less money you have tied up in accounts receivable, the healthier your cash flow will be.
5. Set clear financial goals
It’s important to outline specific financial goals so that you know exactly what you’re working towards. Your goals will give you something to strive for and help to keep you focused on the task at hand.
Some financial goals that you may want to set for your small business include:
- Increasing your sales by a certain percentage
- Reducing your expenses by a certain amount
- Achieving a positive cash flow
- Growing your business to a certain size
6. Understand Your Tax Liability
Taxes are a fact of life for businesses of all sizes, but it’s especially important for small businesses to understand their tax liability. This can be a complex topic, but there are some key things that you should know.
You need to be aware of the different types of taxes that your business may be liable for, such as income tax, sales tax, and payroll tax. It’s important to understand the requirements for each of these taxes so that you can ensure that you are compliant.
You should also know how to take advantage of any tax breaks or incentives that may be available to your small business. These can save you a significant amount of money, so it’s worth doing your research.
Final Thoughts
Having a solid understanding of accounting principles will help you to make informed decisions about the financial management of your small business. These tips will give you a good foundation on which to build, but there is really no substitute for hiring a professional accountant with a deep understanding of the ins and outs of your industry.
Book a free consultation here, to discuss your needs and how we can help you grow.
6 Mar 2023
As a small business owner, you will eventually want to scale up.
Scaling your business means growing it to a point where it can support more customers or clients, more employees, and ultimately make revenue.
However, attempting to scale too soon can spell disaster. Trying to scale before your business is ready can cause a loss of customers and employees, as well as serious financial problems.
So how do you know when it’s time to scale?
We’ve listed five key ways to tell whether or not you’re ready to take your business to the next level.
1 – Examine Your Current Business Model
Some business models are more scalable than others. What works for your business while you’re still relatively small might not work when you’re trying to accommodate more employees or satisfy a greater level of demand.
Take a close look at your current business model and ask yourself whether or not it can be adapted to a larger business. If not, you’ll need to come up with a new model that can support your growth.
Generally speaking, businesses that are more scalable have lower overheads and can generate a higher return on investment. The leaner and less labour-intensive your business is, the easier it will be to scale.
2 – Look at Your Customer Base
Another way to tell if you’re ready to scale is by looking at your customer base. Do you have a large enough customer base to support more employees and increased demand?
If your answer is no, then you need to focus on building up your customer base before you try to scale. A business can only grow as fast as its customer base.
It’s also important to consider whether there is the potential for your customer base to grow significantly. If you’re only catering to a small niche market, it might not be possible to scale your business without branching out into new markets.
3 – Make Sure You Have the Right Team in Place
A key part of being ready to scale is having the right team in place. As your business grows, you’ll need more employees to help with the increased workload.
But it’s not just about having more employees. It’s also about having the right employees. Make sure you have a team of people who are passionate about your business and who want to see it succeed.
You’ll also need to ensure that your team is equipped to handle a larger workload. Make sure you have systems and processes in place to help them work more efficiently.
And finally, you need to be sure that your team is able to work together effectively. Strong communication and collaboration are essential for any team, but they become even more important when you’re trying to scale.
4 – Assess Your Financial Situation
Scaling your business will require a significant investment of time and money. Before you take the plunge, you need to assess your financial situation to make sure you can afford it.
Take a close look at your revenue and expenses to see if you have the cash flow to support more employees and increased demand. You might need to invest in new equipment or make other changes to your infrastructure.
All of these things cost money, and just because your business is turning a profit doesn’t necessarily mean that you have the cash available to make these investments.
It’s also important to consider how you will finance your growth. Do you have the savings to cover the costs? Or will you need to take out a loan?
5 – Carefully Weigh Up the Pros and Cons
Finally, it’s important to have a realistic understanding of the pros and cons of scaling your business.
Scaling can be a great way to accelerate the growth of your business, but it’s not without its risks. Make sure you carefully weigh up the pros and cons before you make a decision.
The bottom line is that there is no one-size-fits-all answer to the question of whether or not you should scale your business. It depends on your specific situation and goals. But if you’re thoughtful and strategic about it, scaling can be a great way to take your business to the next level.
Final Thoughts
Scaling your business is a big decision. There’s no right or wrong answer, but there are some things you need to consider before you make a decision. It also may be the case that you’re not ready to scale right now, but that doesn’t mean you never will be.
Book a free consultation here, to discuss your needs and see whether it’s the right time to scale your business.
