The start of the year is often a great time to take a step back and look at what business goals we’ve achieved over the past year, including what worked and what didn’t.
Although it can be difficult to find the time to assess your business strategy when you’re caught up in running a business, it’s important to do this on a regular basis.
Business owners need to focus on the key areas that will ensure long-term success. These include marketing, sales, cash flow and risk management.
However, if you’re not managing your finances then your business is unlikely to grow.
Time to grow
The growth phase of the business, when you’re just starting out, can be an exciting time but maintaining growth requires an increased time commitment which can be stressful.
From ownership structure to funding options, there are many ways to grow your business and ensure long-term success.
It’s important to review your strategic and financial goals at this stage, including:
- Your ownership structure: your choice of business ownership structure in the early stages of your business will have been based on the needs of your business at the time and what worked then may no longer work now. Having the wrong ownership structure can affect the amount of tax you pay, risk exposure, and whether you can access finance. Changing your structure could help your business grow.
- Strategic direction: this will change as your business grows and you’ll need to think about your mission and where you see yourself in the future. Where do you want your business to be in five years and how will you get there? Your workforce will be a key component in this as they’ll be implementing the strategy to further your business. So, make sure you hire the right people. Also keep an eye on your finances and review this regularly to help you manage investment decisions and anticipate future demand.
- Accounting software: this may need updating from when you first started your business. Is your current system addressing your current needs? Your accountant should be able to advise you on this, along with national insurance, business tax relief, pensions auto-enrolment and other issues.
- Have a credit control system in place: this will help you reduce risk by ensuring you’re paid on time which reduces bad debt. The system should be able to help you with credit checks on customers, ensuring invoices are issued and paid on time, and have stop points in place to avoid customers exceeding credit limits.
- Financing business growth: when you’re growing a business, you’ll require additional capital to maintain growth, whether it’s for more employees, bigger premises, sales and marketing or new equipment. You could consider taking out a commercial loan, selling shares to outside investors, offering equity to staff or other investors, or even newer options such as crowdfunding. If you require new equipment you could consider asset finance such as leasing or hire purchase. Again, your accountant will be able to help you understand the different financing options available to you.
- Tax incentives: depending on your business type, age, what you require the money for, and other factors, you may be able to access government incentives. These include four venture capital schemes such as the Enterprise Investment Scheme, which can help you raise money through new shares. There are also schemes such as the Research & Development tax reliefs which could allow you to claim corporation tax relief; and Entrepreneurs’ Relief which could allow you to pay less Capital Gains Tax when you sell or dispose of all or part of your business (read our blog on exit planning if this features in your plans).
Have you got the financial skills you need?
Find out how our specialist finance recruitment team can help form the bedrock of your business planning and finance needs with our permanent, interim and part-time finance staff. Get in touch today for an initial consultation.