Entrepreneurs and self-employed professionals across the UK have been forced to adapt to an ever-changing health and economic climate. Our 10-step roadmap is designed to equip your small business with the tools it needs to get through the coronavirus pandemic and look to a brighter future in 2021.
1. Reflect on the past year
You need to ask yourself three questions:
- What worked well?
- What worked OK?
- What didn’t work?
Apply these to any activities that went well – it could be anything from carrying out a job more efficiently to winning a new customer. You can then build upon these successes over the coming year. After looking at the wins, it’s worth looking at the things that were OK. These could be turned into wins in the coming year as they may only need a few adjustments to do this.
Although it may be a little disheartening looking at what didn’t work well, you must understand why. This will help you avoid these mistakes in the future.
2. Make a business plan
Drawing up a business plan doesn’t need to be complicated and doesn’t even have to be lots of facts or figures, it just needs to be clear about what your goals are.
You may already have a business plan, in which case, all you need to do is check that it is still accurate and relevant to your business. You may need to tweak a few things, but you will have a solid starting point, so it shouldn’t take too long.
It will ensure your business stays on track but will help you and your accountant spot future tax planning opportunities that in turn could lead to tax savings.
3. Budgets and cash flow forecasts
Whether you are a start-up business or well-established, a sound budget is essential to safeguard your assets and maintain profitability. Revisit your existing budget or start from scratch, challenge the assumptions within, update where necessary and most importantly think about the cash flow you will need. Does your business need fresh finance – perhaps in the form of a Bounce Back Loan (BBL) or Coronavirus Business Interruption Loan Scheme (CBILS). The window for applying to these Government backed loan schemes has recently been extended to 31st March.
Planning will also help support you make key business decisions – for example do you need to look at furloughing staff now that the scheme has been extended through to the end of April?
4. Map out your future
Once you have your plans in place, you now need to create a roadmap on how you are going to achieve them. Breaking your goals down into smaller chunks will make achieving them seem less overwhelming and more importantly will ensure success is more likely.
Once you have done this, it’s sometimes good to start with the items that you know you can achieve, this will give you the motivation to work on some of the more challenging items.
5. Understand your business
Do you know what your sales are this month? Where your biggest costs are? Knowing your business figures and understanding where the money is coming in and where it is going out, is key to being able to make quick, decisive and accurate decisions.
Don’t forget to also look past the figures and know how your business is performing. How does it compare to competitors? Are you efficient in your processes? Can you improve? These help you make informed decisions.
6. Look at technology
Are you fully utilising today’s technology to make your business as efficient and future proof as possible? It might be time to use an online bookkeeping software, like QuickBooks or Xero to manage your business’ finances. This would ensure you have the correct financial data at your fingertips to make important business decisions.
It might be as simple as investing in a couple of iPads so that your salespeople can make professional presentations to clients. The right technology not only helps with the smooth running of your business but can also give you an edge over your rivals.
It might just be you in the business at the moment, but this year could be the year that you need to hire someone to help, or you may need extra help. Whether it’s administrative support, marketing help, technical support or salespeople that you require, it’s a decision not to make lightly. Businesses do need the right people to grow but finding the perfect candidates can take time and money. Therefore, you will need to calculate exactly what you want from your new staff member and make sure you take your time to find the right person for the job.
8. Review you funding options
Whether you want to grow or need to fill some shortages find the funding that suits your needs.
This year has been especially hard on businesses due to forced shut downs, reductions in demand and many more issues that we have had to face.
It’s crucial to make sure you have access to the funding you need to get you through.
Liaise with your local councils to find out what grants are available.
9. Manage your debts
Firstly, use your budgets and cashflow forecasts to ensure you have the money to repay your debts when required – this avoids unnecessary penalties.
Secondly, like any cost to a business, debts have a cost. Normally this comes in interest form. So, like other costs, you should always shop around and find the best deal to ensure you are not overpaying in interest charges.
10. Manage your taxes
In uncertain times it’s a good idea to be aware of your business’ tax liabilities so that you can plan for your upcoming tax bill. The last thing you want when trying to manage cashflow is an unexpected tax bill. Make sure you are talking to your accountant about future tax liabilities and timing of payments.
Also consider working with your accountant to submit your personal tax returns as soon as possible from April 6th onwards. You won’t have to pay your tax bill until 31st January next year and there may be opportunities to defer payment through Time to Pay arrangements, but by submitting sooner you will have more time to plan.
And remember there may be tax planning opportunities for you and your business. A downturn in trade or short-term losses may mean that you can claim a tax refund. Your accountant may also be able to recommend additional tax planning opportunities, such as Research and Development (R&D) tax credits, which can help to reduce your overall tax bill.
Don’t delay, start now!
Spending dedicated time now to look ahead at 2021 will mean you will have a comprehensive plan in place for the coming months and if you need any help or advice with the financial aspects of running your business, please contact us today on 0800 0523 555 or complete our online enquiry form.
Date published 5 Nov 2020 | Last updated 1 Feb 2021This 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.