Networking - Can It Help Your Business?

Here at Abacus, we pride ourselves in keeping in contact with our current clients, but also in developing relationships with new potential clients. Networking events are a great way to meet new people face to face and, over time, these contacts may just become key pieces in the puzzle to developing and promoting your business.

Why Network?

·         We recently went to a networking event which allowed us to meet various other local businesses and professionals. These events not only help us to meet new prospects but also to understand the vast types of businesses we have locally and the challenges they face.
 

·         Networking can help get your company name out to people who you may not have been able to reach in other ways.

 

·         A good thing about most networking events is that there is normally a limit on the number of businesses who can attend offering the same product or service - so you will be in an environment where the competition is fairly limited.

 

How to Network?

·         Remember everyone at these events is in the same boat; you are all there to meet people so be bold and strike up conversations – even if it’s about the weather to start with. From there just ask people what they do – then you can find out more about them and tell them more about you.
 

·         When talking about your business, make sure you relate it to the person you are talking to and their needs as far as possible. They need to see you are passionate about what you do – but also that it has benefit to them.
 

Every contact is a good contact

·         You may meet people who initially seem they won’t need your services or be able to offer you anything you need – but you never know. They may be able to introduce you to others with a need for your services or help you in ways you wouldn’t necessarily think of to start with.

 

How do I find a networking event?

·         Keep an eye out for both local networking events and those events set-up for particular sectors that you may target. These can often be found in local papers or magazines, free pamphlets through your door, posted online through social media and even just through word of mouth.

 

·         If you are interested in local Essex networking events we would be happy to discuss those we attend with you to help get you started.

What Not To Do When Starting A Business!

Starting a new business can be a very stressful time, but it is important to make sure you have measures in place to ensure you do not trip at the first hurdle. Businesses are most vulnerable to failure during the early years of trading, with 20% of new businesses folding within their first year, and 50% within their first three years.

Have a look through the following business mistakes to make sure you turn your business into a success rather than a failure.

·         Not having a business plan- You may have many business ideas, but unless you physically write a business plan you cannot know if any of them will actually work. Make sure you address the key issues that can help form the foundation and initial strategy for any new business venture. It may be time consuming, but it will be worth it. You will need to do your research, but time you invest now will mean you are not wasting time in the future trying to fix mistakes that could have been avoided.

·         Understanding the work involved- Many people enter the ecommerce field with the intention of making easy and fast money. However, there is a lot more to it than that. Make sure you do your research and make sure you know how much responsibility you are taking on.

·         Weak financial planning- Having funds and sufficient capital is essential when starting your business. Without it you will not have the ability to develop and grow. It allows for the survival and prosperity of your business and it is a primary indicator of your business’ health.

·         Lack of contingency plan- There are many situations beyond your control that may impact on your business and cash flow. These include interest rate rises, transport strikes and even political instability. Your business may be able to survive periods where there are no sales or profits, but it definitely cannot survive without cash. Make sure you build up cash reserves that will ensure you are still able to trade during difficult times.

·         Starting without an online presence- This could be the one big mistake you make that holds you back when trying to move forward in the future of business. Pretty much every company out there nowadays have an ‘online presence’, whether this is a website, a social media page or domain name and email. However, if you do not have any of these then it will make things a lot harder for you! You need to be able to be found when searched for, and this will help towards the success of your business.

Are you starting a new business and feel you may need some advice on the do’s and don’ts? Give us a call today or pop in for a free, no-obligation chat. We’re happy to help.

Do I Need An Accountant?

With the tax rules and regulations changing on a regular basis, it may be advisable to seek advice from an accountant to check you are paying the correct amount of tax; as either an individual or as a company. This can avoid any potential nasty surprises from the Inland Revenue.

When deciding if you need an accountant, think about your personal or business circumstances, have they changed in recent months or years? An accountant can give you advice on many subjects, such as;

·         are you on the right tax code / have you been paying enough income tax?

·         do you need to register for VAT?

·         what type of business you should set up as i.e. Sole trader, Limited company etc?

·         the records you need to keep on file for the business

·         how much you should be setting aside for income tax and national insurance

·         ways to simplify and streamline your business

·         how to keep more of your profits instead of giving them all to the taxman!

The idea of having an accountant is not to COST you money, but to help SAVE you money.

A good accountant can also assist you when creating a business plan, and they will often also be able to introduce you to software which can help you stay on top of the business and your goals for the future. For example at Abacus we use an online book keeping system which allows us to monitor your accounts all year round and help you keep on top of invoices, receipts etc, and allows us to offer you much better tax planning advice.

If you have your own business or you are an individual and you feel you may be paying too much tax, speaking to an accountant can help you identify and fix any issues that may be present before HMRC get involved.

Furthermore, having an accountant can free up more of your time - meaning you can be focusing on your company, service and goals.
 

So, what should your accountant provide for you?

·         Your accountant should be a trusted advisor

·         All tax returns should be submitted on time

·         They should be somebody you can talk to any time of the year with any queries

·         They should provide guidance regarding your business and cash flow

·         Your accountant should be a valued member of your business

·         They should fully understand your business and its needs

·         And most importantly save you time and money

Reasons To Be Self Employed

Being Self Employed

So you’re thinking about becoming self-employed? Well, first things first you need to contact HMRC. You should tell them that you want to register as self-employed and also the date you started your business. You then need to start paying Class 2 National Insurance. This is a fixed weekly sum. The two ways of paying this are monthly or half yearly. However, if your total income is less than a certain amount each year, you are able to get an exemption from paying class 2 National Insurance, although it can be a good thing as it does help contribute to your basic pension. Once registered you will get your unique tax reference. It is a 10 digit number that is only issued to those who are self-employed.

If you are self-employed, you will have to fill out a self-assessment tax return each year. In April or May, HMRC will send through a letter asking you to complete one of these. This is just so HMRC have information about your profits from your business and any other income you may receive that you should be taxed on. It allows them to work out how much national insurance you should pay. The more detailed the information and the more accurate the records you keep the easier and quicker it will be for HMRC to process, and also for you to answer any questions HMRC may have for you. At Abacus, we can help fill out your tax return for you, to make sure you have everything covered and you don’t have any nasty surprises.

Also, if you are self-employed you need to make sure you separate business and personal expenditure - having another bank account could really help you here. Furthermore, you need to make sure you keep every piece of paper that is business related! Look at keeping all sales invoices that you send out, all expense receipts, a spreadsheet of the amount of business miles consumed, (by car, motorbike or bicycle). Also, all bank statements, paying in books, cheque stubs and credit or debit statements are also important to keep hold of, as well as any letters you receive from HMRC. Organisation is key. Although looking at possibly having an accountant can help you with this as well. Here at Abacus, we have a great online book keeping system that can really help to organise you and your business. Talk to us about it today!

What Causes Business To Go Bust

What causes businesses to go bust?

Businesses run into problems for all sorts of reason but most of them are avoidable. Here are some of the most common problems we come across.

Failure to understand your market and customers
Think about who your customers are and consider the best ways to reach your target audience. Research into your customer’s other suppliers may help you identify gaps in what they are receiving – gaps that you and your business could fill.  What makes you different? What can you offer that others can’t?

Choosing a product or service that isn’t very profitable or doesn’t have a wide market
You may gain a lot of interest and activity when starting out, but if the profits aren’t enough to sustain your business needs, then a re-evaluation may be in order. As a company, if you are targeting a very niche market and a narrow audience you need to stand out from your competitors to ensure high sales numbers.

Unable to react to trends and competition
If competitors are up and coming and are following the current market trends, it can be easy for your business to be pushed aside if you aren’t doing the same. Think about what your competition is doing differently, as what may have worked in the past may not work in the future.  So be willing to change and adapt to new ideas and technology to maintain your business.

Failing to offer a reasonable price for your product/services
When it comes to pricing, again competitive awareness is key – you want to be viewed as good value for money when your customers review their options, while also ensuring your business remains profitable. Promotional offers for new customers or running deals for a limited period of time can help to grab attention initially but remember longer term to sell your company or products benefits.

Cash flow problems
Cash reserves are vital when starting a new business. Enough cash to keep you afloat for at least the first sixth months and managing how much cash you are receiving and paying out is essential. You may have a slow start but if this is still happening after the first year, is it time to look at budget cuts and possibly a different financial angle? Should you take more upfront payments? When should credit be given or not given to customers?

Management and delegation
You can’t do it alone, and being unable to manage your business efficiently is never good, so although you may see your company as your ‘baby’ employing someone with the necessary skills to help means there is more stability and a better action plan for your business. Try not to do everything yourself or your product or service level may slip putting your whole business in danger.

Not asking for help!
Asking for help in the early stages can really help when dealing with all manner of business concerns. For example, here at Abacus we know from experience that speaking to your financial advisor or accountant early on means you can have ongoing support, and if there are tough times ahead, they may be able to help you identify issues and get your business back on track before it’s too late.

Having a good adviser is crucial to getting ahead in business. If you would like some free impartial advice then please feel free to contact one of our friendly team on 01376 343535 or email us at info@abacus-accountancy.com

 

The Importance Of Business Insurance

Some business owners don’t consider business insurance as being essential and feel it’s an expense they would just rather avoid. However, even with the financial considerations, this should definitely be a incorporated into your budget. Accidents unfortunately do happen, no matter how hard we try to avoid them, so the protection that an insurance policy brings will support the success and growth of your business in the long run.

Having business insurance will mean that in the event of a major loss, you are still able to keep your business up and running, rather than losing what you have worked so hard for.  When a company carries insurance, loss and closure are normally only temporary following an incident or accident - rather than potentially permanent if there is no cover in place at all.

Many people think business insurance simply covers events such as fire or floods; however you also need to consider liability. If a client trips over a wire in your office and is hurt, or one of your products has a defect and results in injury to a customer; this will likely cost much more in legal fees if you have no insurance cover, than the price of taking out the policy would have cost. 

You will need to consider aspects such as liability, theft, fire and flood, litigation, and personal injury and illness. The level of coverage you take will depend on your industry and the size of your business. When you exhibit at trade shows, or even just set up a small stall in Braintree town centre for example, you will be asked to prove you have public liability insurance. Without it, you are uninsured and liable.

If you are not covered, you risk losing your assets and worst case your business altogether if the incident were something major. As the owner or director of a company, it is essential to understand the role that business insurance plays and how your organisation will benefit from it – even if it is only from the peace of mind it brings.

Growing Your Business

When starting your business, you are always going to invest a lot of time, money and effort into getting your business off the ground and up and running. However, there comes a time when you realise there are more doors to open and roads to explore in developing your business. So what do you do now to try and grow?

It is great to be the manager of your own business, as you are then able to make a difference and decide that it’s time to make some changes.

Within business, you need to be able to have a solid business model, with targets and goals to hit. Setting realistic and easy goals are good if you are hitting them, but it also means you don’t strive as much to hit and exceed harder targets. In order to grow your business you need to be able to successfully put in place, understand and constantly improve your business model.

You could look at opening another location. This doesn’t always work for everybody, but it is an option you may want to consider. However, make sure you have been stable within your cash flow, with a steady growth over the past few years. Furthermore, you will have to have a strong team behind you who are happy to help set up and get you up and running. Also, make sure you look at how you are financing the new location- you do not want to get into something and then run out of money half way through.

Another option is to look at franchising your company. It allows you to branch out into a whole new area, and market outside of your home territory. This means you are targeting a whole different audience, and making people more aware of your products and your services. It also means that you are allowing others to have more control over your business and you trust the company name in the hands of somebody else. You have your businesses being run across the country without you having to have loads of control over each one.

Looking at setting up partnerships to advertise and grow your business can also be an option. This means you can delve into another company’s client base and through referrals and word of mouth you are able to expand marketing for your business. Partnering up with a company who offers a service that you can complement means you can join together and strengthen your services, as well as making a profit at the same time.

For more business advice, or to see if there is any way we can help benefit your business, pop in for a free, no obligation chat today!

When To Incorporate

Generally a “Limited” company will end up paying less tax than a Self Employed person – depending on how much is earned and the nature of the business expenses. A very rough guide is around 3K+ of tax saved for someone on 50K per year.

Accounting costs are usually slightly higher when limited but given the tax benefits this is usually inconsequential. If you are earning more than £20,000 profit, then it’s usually a good time to start thinking about becoming limited.

It’s now really easy to set up a limited company, and it can be done within a matter of hours online. This means there is no more waiting for paperwork to be processed, so if you are worried about a dreaded wait from Companies House, you need worry no more!

A limited company also has its own legal identity and this means third parties liaise with the ‘company’ rather than just the directors. It also means the only way the company will cease is if it is liquidated or formally wound up. It can also help employees feel more security because the business is perceived as being structurally safer.

Furthermore, many suppliers and customers will not deal with a business that is not limited. Therefore being a limited company can help build strong relationships with partners and other companies, and also allows you to show you have strong and effective management processes in place.

There are also tax benefits when becoming a limited company. As a sole trader and partners in a partnership, you pay income tax. However, if you are a limited company you pay corporation tax. As a director, you can mix a basic salary with dividends, and if structured correctly, this means the company doesn’t have to pay national insurance.

Sound like going limited could benefit your company? Pop in for a free, no obligation chat to find out more.