Refresh your business plan
The past couple of years have thrown up various unexpected challenges including COVID-19 and the rising cost of living, so the plans you had for your business may now need to change.
Review your business plan to check that it is still accurate and relevant. Think about what worked well before 2020 and whether it is still effective. If not, make improvements or adjustments. Go through your goals and consider whether they remain realistic.
You may need to pause some growth plans but there may also be new ways you can expand your business such as launching into new markets, developing a new product or service and reaching new types of customers.
Assess how your sector has been affected in general and review whether any new opportunities have arisen. There may be a new gap that your product or service could fill.
Look back on how you dealt with the pandemic and whether that could lead to future growth. Your business might have pivoted and developed a new product or service or changed a process that appealed to customers. For example, due to the closure of physical retail, you may have experienced an increase in online sales. This means you might have to rethink your ecommerce strategy and how it fits into your business’ future growth. Reflect this in your plan.
Even if you didn’t make significant changes due to the pandemic, current customer attitudes, such as a desire to continue shopping online, supporting local companies or buying sustainable products that don’t harm the environment, may highlight new opportunities for your business.
Review your budget and cashflow forecast
Once you’ve updated your business plan you should review your financial situation. Think about how much cash your business will need and plot out a new cash flow forecast.
A cash flow forecast shows how much cash is expected to flow in and out of your business. It is key to understanding where your business is right now and planning for the future. A finance provider will typically require one before approving any funding.
As you look towards recovery you might have new costs you need to take into account for your forecast. This could include taking on new employees, buying equipment and an increased marketing budget.
An accountant can help with your cash flow projections.
Examine your funding needs
It’s vital that your business has enough finance to operate. Disruption caused by the pandemic, rising costs or plans for future growth might mean extra funding is required.
Formulating your cash flow forecast correctly will identify if external funding is needed.
The Government’s coronavirus grant schemes have ended so explore other options. That could include non-COVID grant schemes, bank loans, overdrafts, crowdfunding and angel investors.
Read a guide to eight ways to fund your small business here.
File your tax return early
Although the official deadline may be many months away, it makes good business sense to work with your accountant and file your Self Assessment tax return early.
Calculating your tax liabilities early means you can budget and manage your cash flow by planning for how much tax you owe. Remember that filing your tax return before 31st January cut off doesn’t mean you have to make a payment straight away as the deadline still applies.
Coronavirus business grants are taxable so if you received such funding it might have distorted your profitability and increased the tax you need to pay. Filing your tax return well in advance of the payment deadline will help you plan your cashflow for such a situation.
The impact of the pandemic may have led to your business making a loss, so you could be eligible for a tax refund. The sooner you file your tax return, the sooner any refunds can be processed so you receive the money.
While preparing your tax return, your accountant may also be able to recommend additional tax saving opportunities.
Embrace new ways of working
The pandemic led to millions of people working from home. Although it was required due to legally mandated lockdowns, many businesses experienced a rise in productivity and reduced costs with employees enjoying improved mental health and less commuting expenses.
Despite the removal of coronavirus restrictions, several businesses are continuing to embrace this trend by adopting a hybrid approach with a mixture of home and office working.
The pandemic has made many people rethink the world of work and if you have sufficient systems set up to maintain effective collaboration and communication, your business could enjoy benefits including reduced costs as a result of being able to downsize your office space and cut other overheads.
Consider raising prices
Post-pandemic recovery is a priority for business owners, but there are also new challenges to deal with such as the rising costs of things like energy, raw materials and wage bills.
Increasing your prices may be a solution. Doing that effectively while minimising the loss of customers involves:
- understanding your exact costs so you know if you need to increase your prices and by how much.
- monitoring competitors to see if they are raising prices and by how much.
- segmenting your customers to highlight those likely to be least sensitive to price increases.
- strong communication with customers so they understand the reason for the price increase.
- adding extra value to your product or service that is low cost for you but softens the blow of a price increase for customers.
For more detailed advice on how to raise your prices, read this guide.
Give your business a head start today
Dedicating time to looking ahead will mean you will have a comprehensive plan in place for the coming months. If you need help or advice with the financial aspects of running your business, call us on 0800 0523 555 or complete our online enquiry form.
Date published 13 May 2022This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.