At Turner Little, we can help with different aspects of setting up your business, from financial advice to more complicated planning. Here are our sure-fire steps to achieving a financially stable business in 2018. Follow these good habits and you’ll be on your way to a lean, mean, fighting fit business.
1. Learn from past mistakes
People often talk about learning from past mistakes, but how many put it into practice? Mistakes are inescapable when you’re setting up a business and learning from them can help you achieve more than you originally thought possible.
The most important aspect of a business error is how you respond to it. Carry out the following steps and turn mistakes into success:
- Look at 2017’s statements – go through last year’s financial statements with a fine-tooth comb. Include profit and loss and study the periods of high and low sales. Spending time on analysis like this will show you the causes behind any losses so that you can change them in future.
- Analyse thoroughly – analyse your stock and turnover to ensure you are managing your inventory in the best way.
- Compare revenue to spend – what did you waste money on last year? Find out and don’t repeat the same errors.
- Assess your goals – did you achieve them last year? Look at your business plan for 2017 and see whether you ended the year near to your initial goals. If you didn’t, decide why this is. Were you too ambitious or were too many mistakes made? This analysis can help you set realistic and achievable goals for this year.
2. Work out how you can cut costs
A thorough audit will help to make your business lean for 2018. The kinds of areas in which you can generally cut costs include:
- Your energy contract – lots of small businesses in the UK are wasting money on their energy bills because they don’t look around for better tariffs. Use a comparison website and find the best contract for your needs.
- Cut energy use – it’s easy to forget about basic steps to ensure efficient use of energy, which can push your bills up.
- Office rent – try and renegotiate your contract, it’s always worth a go.
- Bank charges – banks are generally not transparent, and your business could be footing unnecessary charges. Find out if this is happening to you.
3. Learn about your competition
Properly understanding your business competitors can help you outstrip them. Study the following:
- What they’re selling – analyse their products, services and marketing and compare your company’s strengths and weaknesses. Find out how you can be better.
- Internet rankings – who ranks higher on Google? Use keywords relating to your sector and see where your business comes. If you are lower than your competitors, then improve your marketing and SEO.
- Service quality – even if you’re smaller than your competition, that’s no reason for inferior service. Learn what customers want and be responsive and proactive.
- Marketing – who has better marketing? If your strategy isn’t yielding results then change it up.
4. Prepare for growth
Brexit and economic uncertainty isn’t slowing small businesses down in the UK. More than half of SMEs in the UK predict that they will increase their revenue by 50% or more during 2018. Uncertainty means customers are shopping around for better deals – take advantage of this.
Diversify your company offering to meet emerging trends and demands. Change the way you promote your goods and services by making it as simple as possible for customers to find you.
5. Maintain a healthy cashflow
Struggling with cashflow is a common problem for start-ups and it’s vitally important to ensure your business isn’t running on empty. Here are some things you can do:
- Ensure payment – use accounting software to manage your invoices so that you can see any late payers.
- Annual cashflow forecast – this is a must. Again, you can use software to carry out regular forecasts automatically.
- Move fast – if you discover capital is low, take measures to shore up the business until your finances improve.
6. Chase late payments
The Federation of Small Businesses (FSB) says that around 50,000 small businesses in the UK fail every year due to late payments. Here are some steps you can take to ensure you get paid promptly:
- Credit check customers.
- Use technology appropriately with electronic invoicing.
- Have a look at your payment terms and shorten them if you can. Ensure your customers understand your terms.
- Use an automatic payment system, such as direct debit. This puts you more in control.
About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.
For more information, please contact us on 01904 783101.
