Some Finance Tips when running a business…
As part of Fistral’s 21st anniversary year, we’ve asked the Directors to share their thoughts and experiences on a variety of business-related issues. In the eight of the series, we asked what finances advice they had when running a business or SME. Below they give ten recommendations.
For the latest article in our 21st anniversary Top Tips series we asked our Directors:
“What financial tips would you give to an SME or new business?”
10 finance things to do when running your own business are:
- Maintain Low Outgoings – Don’t spend what you don’t have unless you are guaranteed a (quick) return.
- Have Low or No Borrowing from the Bank – You get nothing for nothing, be careful what you risk or put on the line…
- Make a Reasonable Profit but Always Give Good Customers Value – Think of it as a partnership between the customer and yourself: you both need each other. Make what you need but not at the customers’ expense or compromising on quality products or services.
- Get a Good Bookkeeper – Someone who will keep the books up to date, nag you into getting invoices out and signing VAT forms. This is probably the best advice ever!! (Just don’t pinch ours!)
- Get a Good Accountant – Unless you are an expert (and have the time!) it’s worth the expense to employ someone who knows what they’re doing. And make sure they’re trust worthy.
- Be Open and Honest – Especially regarding expenses etc.
- Always Pay Taxes – In full, and on time. Seeing cash go out always hurts, but try to think positively: at least you have an income stream, and at a level that means that something (hopefully the majority) is left in the bank.
- Pay Employee Salaries, Invoices and Expenses First – As a boss you are always the last to get paid, so get used to it from the start.
- Have a Good Forecasting Model – Either buy one or make one yourself (Excel will do); something that will allow you to plan in the short-, medium- and long-term. And remember to include NI, pension contributions etc.
- And Finally, especially when starting out, Make Sure You Know Where Every Penny is Going – If you don’t, who will? And how can you trust any financial advice you’re being given (garbage in = garbage out)…