If you’re a company that spends a lot of time managing your finances, whether it’s Direct Debits or...
Top 10 financial tips for small businesses
The world of business for small companies can be a daunting place. Getting your business off the ground is one thing, but ensuring consistent profits and growth is vital for your company's survival.
It's predicted that SMEs (small and medium-sized enterprises) account for 99.9% of the UK's business population, meaning many companies across the country are in the same boat as you.
If you're looking for ways to generate cost savings, efficiencies and profits, consider actioning the following 10 financial tips for small businesses.
- Set up your company at Companies House
- Work with a good accountant
- Always meet your tax deadlines
- Research and understand your market
- Ensure your website and marketing are in check
- Look out for business grants and support schemes
- Continually monitor your financial position
- Ensure your customers pay on time, every time
- Look for new ways to become efficient
- Reinvest where possible
1. Set up your company at Companies House
You should set up your company at Companies House as soon as possible. All limited companies must register and publish details of directors and company information.
It can also help to improve the visibility of your company online. Companies House provides several search engine optimisation (SEO) benefits, with citations being a key ranking factor on Google and Bing. A listing on the Companies House website sends a message to search engines that your business is trustworthy.
However, not all small businesses want to become limited companies and might be better off as sole traders, which is something to keep in mind.
2. Work with a good accountant
When managing your finances, it pays to hire an experienced accountant who can advise you on the best way to handle your finances and ensure everything is above board.
The effective management of finances is imperative for any company, but especially for a small business where every penny counts. A mismanagement of finances can lead to serious implications for your company, so lean on an accountant's expertise to manage incoming and outgoing payments.
3. Always meet your tax deadlines
One of the most important things for any small business is meeting its tax deadlines. Not only does this ensure that your business remains compliant with the law, but it also keeps you away from any HMRC late fees or penalties.
4. Research and understand your market
It's essential to have an understanding of the market you're operating in so you can make informed decisions when it comes to pricing and strategy. Thorough competitor analysis allows you to see what they're doing right — or wrong.
Market analysis will also allow you to identify gaps in the market and what your consumers respond to most.
5. Ensure your website and marketing are in check
To remain competitive in today's digital world, having a responsive website that's easy on the eye and simple to navigate is essential.
In addition to your company website, where time and funds allow, an effective marketing strategy means you can make the most of each customer's interaction with your brand.
6. Look out for business grants and support schemes
As a small business, it can sometimes be difficult to grow and expand effectively. However, grants or support schemes from local authorities or government initiatives can be invaluable.
These initiatives can provide the assistance you need to take on new projects or expand into new markets.
7. Continually monitor your financial position
To ensure your business remains profitable, monitor its financial position every month or quarter. This will give you valuable insights into cash flow management and help keep costs under control in the long run.
Regular reporting will identify flourishing areas of the business and spot areas you should target for improvement.
8. Ensure your customers pay on time, every time
Cashflow issues are one of the biggest issues facing small businesses, so it's important that invoices are sent out and paid promptly to avoid disruption.
Automated payment solutions such as Direct Debit can remove any cash flow headaches and make it simple for your customers to pay for your services.
Automating your payment solution removes most human input requirements, reducing administration time and missed payments.
9. Look for new ways to become efficient
Identifying areas for your business to become more efficient is a great way to reduce costs and remain competitive.
Many companies rely on technology and automated solutions to reduce overheads without compromising the quality of output or customer service levels.
By generating efficiencies, your company will have more time and money to reinvest in business areas that need it most.
10. Reinvest where possible
Reinvesting your profits into the business is vital to ensuring consistent company growth. Your business mustn't become stagnant or complacent over time. Reinvest your resources into staff training or new equipment when extra funds are available.
Get started with an automated payment service
Automating your company's services can generate efficiencies, leading to time and money savings which you can reinvest into other areas.
One way you can ensure a consistent cash flow to your business is a Direct Debit solution. Payments are taken at regular intervals, meaning no more payment chasing and a reduction in management time for your business.
Want to look into an automated payment service? Book a chat with an Interbacs expert by clicking below.