Do You Have A Clue?
I am always amazed at how many small business owners do not have a handle on their finances or have a good grasp of what their business is or isn’t making.
Apparantly around half of businesses fail within 5 years. Yes HALF! And they fail because of lack of profits and or lack of funding.
Entrepreneurs by their very nature are optimistic souls and many underestimate the time to market, the lead time of converting sales and the amount of capital required, even though they may have a great product or service
The Things You Must Do
You absolutely must have a PLAN and it must be costed and well thought out with a budget.
You absolutely must have up to date information on which you can base your decisions upon.
You absolutely must compare your actual results with your budget and evaluate why your forecasts weren’t met. It maybe that you need to re-evaluate your business model. If what you are trying does not work it is far better to see it early so you can take corrective action or even to cut your losses.
You absolutely must get your record keeping and tax affairs in order from day one. If you are a small sole trader you could probably do this all yourself. There is some great very cheap online bookkeeping software out there and most start at around £10 per month. Alternatively get an accountant to do it all for you. Most accountants fees for small businesses are not very expensive.
Paul Stankiewicz is the owner and principal at Paul Marks & Co Chartered Accountants which is the trading name of Paul Marks Ltd a Limited Company registered in England and Wales (registered number 4487645). This article is designed for the information of readers only and is the opinion of the author only. Readers should not act on any of the information contained in this article without seeking professional advice. Nothing in this article constitutes advice, nor does the transmission, downloading or sending of any information or the Material create any contractual relationship. Links to third party websites are provided as a convenience to the reader, Paul Marks Ltd does not control and is not responsible for any of those websites or their content.Paul Stankiewicz and Paul Marks Ltd accepts no liability or responsibility whatsoever for any loss or damage suffered by any user of the information contained on or accessed through this article or the Material downloaded.