Wishing you a Happy New Tax Year is not quite the same as chinking glasses at midnight on December 31st. No festivities or, indeed, fireworks, unless you have feisty dealings with HMRC. However insignificant the date is on the social calendar, when the tax year started on April 6th it did bring the same sense of ‘out with old and in with the new’ for small business owners.
For people running their own companies, the start of the new tax year is a good time for financial and strategic reflection. Wiping the slate clean from 2018 and looking ahead to unexplored opportunities and a positive outlook. Every business owner is striving towards financial success and that means it is a key time for practicalities and planning. As organisers of the first ever Women in Business Expo in October, we wanted to share our ideas and advice to help get you off on the best footing. Whether you’re an existing or prospective business owner, here are some top tips to help you prepare for the 2019/20 tax period.
Plan the Budget: It might sound obvious but believe it or not, many small business owners, particularly sole traders, may not start the year with defined budget plans. At the beginning of the tax year, you should develop the new budget and sales targets for the next 12 months. Even if you work from home, make sure you understand your monthly burn rate and precisely how much money it costs to operate your business - from accounting and legal fees to marketing and insurance. The budget should also include the numbers on how much profit is in every sale or service transaction.
Watch every expense: Have a clear understanding of what you can and can’t claim as business expenses. Every applicable cost, such as office supplies, computers, travel, business mileage and utility bills should be claimed. Regardless of how insignificant or small it seems, as a business owner or a freelancer, it is critical to help maintain cash flow. Getting a firm grip on allowable expenses means you can lower the reported profit and reduce your tax payments. Claiming every expense will effectively increase the amount of money that stays in the business, either for further investment and future security.
Regular financial reviews: On a set date each month, review your businesses’ performance for the preceding month. Depending on the size or complexity of the company, it is good to involve your bookkeeper or accountant who could develop the Profit and Loss statement, balance sheet and cash flow statement. Rather than limiting your use of an accountant to annual tax time, you could call on them as a monthly business advisor. Weigh up the cost involved for this service as it could be an invaluable resource for guidance and savings in the longer term.
Business Development: Sales strategies are critical to the success of small companies and the start of the tax year would be a good time to realign your sales thinking. An important step is to really differentiate yourself and your business. Are you easier to use? Is your product higher quality? Do you pride yourself on customer service excellence? Preferably it’s all of the above. Whatever sector you are operating in, you should be able to clarify your customer needs and craft the best solution. Base the sales strategy around three basic questions: what are you going to sell more of, who you are going to sell to and through whom? The customer mind-set has changed in recent years, they want to feel like they’re being helped rather than sold to, so your overarching sales strategy needs to reflect that shift.
Maximise your marketing: Determine your marketing approach for the next 12 months focusing on ways that you can reach your niche target customer. This doesn’t have to be a budget-busting mass campaign, it’s more about the clever use of content and getting to the heart of your desired audience. You can develop a detailed customer profile by thinking about who your customer is, how they live, what their personal circumstances are, age, marital status etc. Creating a mental image will determine the right marketing messages and the channels you use. Factor in digital and traditional methods from website copy, blogging and social media to flyers, local billboards and print advertising.
At our inaugural Women in Business Event, WIB Expo held 16-17 October in Farnborough, we will provide an essential resource for all potential and existing small business owners. Whether you need practical support and guidance or exploratory chats and networking opportunities, the event has been tailored precisely for women like you. There will be a ‘free to attend’ seminar theatre covering a range of informative topics for anyone running their own business. Sessions include investment and crowdfunding, CRM software and social media marketing, as well as hundreds of exhibitors and speakers to inspire your business brain.
WIB Expo 2019 will take place six months into the 2019/20 tax period so it will be a good time to ensure your business is on track and to seek out any relevant advice. So here’s to a prosperous and successful new tax year. Not the right date for resolutions, but with careful planning, you could have the most profitable year yet.