There are thousands of owners of small businesses in the UK, and you already know that you’ve taken on a substantial risk – but your risk is bound to pay off as long as you have regular customers and clients and can provide them with what they need and give them good value. But along with owning a business come major worries as well, with most of these worries having to do with various financial aspects. So if you don’t want your business to fall by the wayside just because you haven’t addressed (potential) financial issues, here’s a list of top answers to your most pressing financial concerns as a business owner in the UK.
Cash flow is the very lifeblood of any enterprise, and even if you run a popular and successful business, you are still putting your business at risk if your cash flow isn’t in good shape. Dealing with cash flow is inherently stressful, but there is a solution. One thing you can do, for example, is staying on top of your business’ outgoings and incomings. When you know exactly where your finances lie at any given time, you wouldn’t get a nasty surprise and can see potential problems in advance. Pay attention to your invoices and send them out regularly, so it’s easy for you to chase payments before they affect your cash flow.
Tax and VAT
The country’s tax system has always been notorious for being quite complex, and although HMRC tries to simplify the system, many of us still have difficulties with it. If you get something wrong, you could face a stiff fine or penalty, and you don’t want to put your enterprise at risk just because you got your tax and VAT wrong.
One key thing you can do is familiarise yourself with the kinds of taxes you will have as a business owner and individual, such as corporation tax, value-added tax, business rates, and National Insurance; even though this isn’t a tax per se but you still have to pay it to the government. You can also try outsourcing your tax return submission and filing to a good bookkeeping and accounting service, like the central London accountants at Griffin, Stone, Moscrop & Co. They are well-versed with these aspects and can ensure that you avoid any disastrous mistakes.
Even whilst banks on the high street have already been criticised for their stringent rules and practices on lending to small businesses, and they’ve made some changes, it isn’t enough. Your business may be successful in many ways. Still, if your business’ books are not in precise order or aren’t correctly updated, a bank will not likely consider your application for financing seriously.
If you are planning to expand and need capital, this can be highly frustrating. But you can make your small business more appealing to lenders by being clear and precise about your financial requirements for a loan, letting lenders know why you need the loan and how it will positively impact your enterprise. It’s also crucial to look for the right loan – something that meets your requirements – and look for the right lender as well. It pays to let an expert handle your books in such a way that they will look attractive to a prospective lender. If it looks great on paper, you have a bigger chance of being accepted for a loan.
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